Do you know the best way to get sellers to help pay your closing costs, prepaid taxes, insurance and reserves when you buy a home?
…You ask them!
You make it part of your offer to purchase.
Depending on the circumstances they may or may not say “yes” to your request, but you should at least know the limits they are allowed to help you based on the loan program you are using.
Here is a breakdown of the maximum seller help amounts by loan program…
Program: Conventional (fannie/freddie), owner occupied…
1) 25% or more down payment = 9% allowed seller contribution.
2) Less than 25% down and up to 10% down payment = 6% allowed seller contribution.
3) Less than 10% down payment = 3% allowed seller contribution.
4) Fannie Mae Homepath: less than 25% down = 6% allowed contributions; 25% down or more = 9% allowed contributions.
Program: FHA
1) 6% maximum seller contribution.
Program: VA
1) 4% closing cost contribution.
Program: USDA
1) No limit to how much sellers can contribute (is limited by actual closing costs/prepaids). When a home appraises higher than the sales price, closing costs can be financed with USDA rural loans up to the difference between the sales price and appraised value.
That’s it for today!
Have a good day today! …and thanks for reading.
Brett
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