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The Seller May Pay
You have finally saved enough
for a down payment on your first home, with a little left over to buy the
furniture you will need. Then you hear about additional closing costs you
weren't anticipating which seem like a real setback.
One way to cover such a shortage is to make the
sellers an offer that calls for them to credit you for some of the closing
costs. As a rule, the sellers may pay a maximum of 3 percent of the sales price
if the buyer is putting five percent down. If the buyer is making a down payment
of 10 percent or more, the seller can contribute up to 6 percent of the sales
price to cover the buyer's closing costs. Some items must be paid by the buyers,
such as prepaid taxes and the first month's mortgage payment. Sellers may also
contribute to paying the appraisal, points, title insurance, settlement attorney
fees, state or local transfer taxes and similar items. Keep in mind that if the
credit is included in the price of the house, the appraiser will have to justify
the amount, based on sales prices of similar homes in the neighborhood.
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