The Benefit of Seller Paid Closing Costs

The Benefit of Seller Paid Closing Costs

 

Did you know seller's often pay part or all of a buyer's closing costs and prepaid items?  In our Northern Kentucky and Ohio market they do. Now more than ever this can be a benefit to the buyer because we for the time being are in a very different world of pricing on mortgage loans.

 

In a normal market you have a range of choices when it comes to interest rates, the amount you want to spend and the amount you have available. It typically is not difficult to use something called premium pricing where a lender pays part of the closing costs for a buyer. Simply put a lender can bump the rate up a bit creating a surplus over and above the cost of the par rate and use that surplus to offset some closing costs for the buyer.  This pricing does not particularly exist today. It will return surely at some point but for now there is not a lot of surplus. 

 

A seller can pay closing costs and/or prepaid items such as home owner insurance, interest, taxes, etc. for a home buyer. This saves money that the buyer does not need to come up with at closing. The seller amount is limited depending on the loan program as to what percentage they can pay.  If the lender does not have premium pricing available taking a hard look at the cash needed at closing is important. Be sure and investigate the cash needed for closing before the contract is agreed to.

Comment balloon 2 commentsDora Griffin • April 30 2020 04:34PM
The Benefit of Seller Paid Closing Costs
share
The Benefit of Seller Paid Closing Costs Did you know seller's often pay part or all of a buyer's closing costs and prepaid items? In our Northern Kentucky and Ohio market they do. Now more than ever this can be a benefit to the buyer because we… more
Mortgage Lending Guidelines & Corona Virus
share
Mortgage Lending Guidelines & Corona Virus The arrival of the Corona virus has changed our lives significantly and it should come as no surprise that it has changed the mortgage lending world. Not only has it changed the interest rate market… more
UNEMPLOYED? PUTTING YOUR HOME BUYING ON HOLD.
share
UNEMPLOYED? PUTTING YOUR HOME BUYING ON HOLD Our country is experiencing something it has never gone through before. Over the last few years we've experienced a shortage of homes for home buyers. Now with the the corona virus how many folks will… more
Feds Dropped Discount Rate, Now What?
share
Feds Dropped Discount Rate, Now What? Feds dropped the discount rate 5 points in a surprise move. A surprise move for the markets and unsuspecting public. Now what? Now the phone will start ringing for L O's from those with mortgages saying is… more
Underwriters Request Additional Documents
share
Underwriters Request Additional Documents When underwriting a mortgage loan underwriters usually start out with some specific documents for the particular loan. These documents are provided when a seasoned loan officer gets them from the borrower… more
What Are Higher Balance Loans?
share
What Are Higher Balance Loans? Conforming loan balances are out for the year 2020. A conventional loan that does not exceed $510, 400 for a single family and $765, 600 for a two family home fits into the conforming loan balance maximum. But does… more
SHOP SMALL BUSINESS SATURDAY NOV 30, 2019
share
SHOP SMALL BUSINESS SATURDAY NOV 30, 2019 SATURDAY NOVEMBER 30, 2019 is shop small businesses Saturday This is the day the focus is on small businesses. It is hoped that on this Saturday if you make it a point to stop into a small shop you… more
Are you looking for fast or a trusted adviser when buying a home?
share
Are you looking for fast or a trusted adviser when buying a home? When it comes to getting a home mortgage to buy a home are you looking for fast or a trusted adviser? (This is kind of a trick question because you can have both. ) Many mortgage… more
Is it time to refinance your home mortgage?
share
Is it time to refinance your home mortgage? Is it time to refinance your home mortgage? How do you know when it is time? Interest rates have improved of late compared to where they were the earlier part of the year. This has brought a lot of… more
Refinancing? Get All The Facts.
share
Refinancing? Get All The Facts. The Feds dropped the prime rate yesterday. Does this mean long term rates are coming down? The prime rate does not equate to an equal drop in long term rates. However, when the prime rate goes down it is indicative… more