Seller Paid Closing Costs

5/6/2015 – Percentages below are subject to change.

Seller Paid Closing Costs

Seller-Paid Closing Costs Allowed By Types Of Loans

USDA and FHA:                 6% all LTVs (there is talk of lowering this
to 3%, however now it remains 6%)

VA:                                       4% All LTVs

Conventional primary residence and 2nd Home:

75%>LTV:            9%

75%<LTV<90% : 6%

LTV>90%:            3%

Conventional Investor

All LTVs:               2%

Seller paid closing costs are a great way to negotiate a deal and save money in your real estate purchase. There is a catch though, lenders will only allow a certain percentage of the purchase price to be paid at closing through seller-paid closing costs.  This works great for first-time home buyers to be able to afford their purchase – a conventional loan would allow 3% of the purchase price to be paid with seller paid closing costs if they could not afford a down-payment of 10% or more.

Closing costs can turn out to be less than what is stated in your contract.  If that is the case, your lender and Realtor can be creative to figure out how to use the extra money.  You can NOT get back the extra money in cash at the closing table.  Things like a purchasing a home warranty or buying down the loan interest rate can offset the extra money slated for closing costs.

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