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dan163 · Joined: 18 Jun 2009 Posts: 8 4.68 Dollars($)

I spoke with a lender the other day and he said that 6% seller's assist would be available to me. How does this work exactly?

For an example....
Let's say I'm approved for $100,000. If the house I'm interested in is $100,000, would I offer $106,000 with the seller paying the $6,000 in closing costs? If this is accurate, does that mean I need to be approved for the $106,000 or does the fact that the seller would be paying $6,000 in closing costs reduce the price to $100,000?

Any clarification would be appreciated.

smckaybiz · Posted: Sun Jun 21, 2009 7:22 am Post subject:

Welcome to the forum Dan,

The seller assist in most cases just goes towards the closing costs which usually will run you anywhere from 4-6K. So if you are trying to buy a home for $100K than you only need to be approved for that much, or the total amount minus your down payment.

I am actually in the process of buying a home right now in which the seller was asking for 99500. We ended up talking them down to 95K and the seller's assist. We will be putting $3500 down so the total amount we are being approved for is 91500. Even though we only got the price down 4500 with the sellers assist its like we are saving around 10K from the original asking price because we don't have to try to finance the closing costs in with the loan or pay for it "out-of-pocket".

Hope this info helps and best of luck...

...and while you're at it wish me some luck as well. Closing is set for July 10th and I'm keeping my fingers crossed that everything goes as planned!

smckaybiz · Posted: Sun Jun 21, 2009 7:23 am Post subject:

Oh, and to all the Dad's out there,

HAPPY FATHER'S DAY!!!

Posted: Sun Jun 21, 2009 7:55 am Post subject:

Thanks, that explains it much better than what I was finding online.

Good luck to you!

gunzijjistaff · Joined: 07 Apr 2009 Posts: 712 4.51 Dollars($)

Hi s.mckaybiz,

Nice information submitted on this forum.

Amazing Knowledge.

Thanks & Regards.

gunz.ijjistaff

Very Happy

wamacdonald1 · Joined: 08 Jan 2010 Posts: 2 1.58 Dollars($)

Confusing I know. You are paying $106,000 for the home (sales price), and you need to be approved for $106,000. Actually, since your mortgage will be higher, you need to be approved for the higher loan amount. For example, $160,000 X 80% = $128,000 (20% down payment) - $170,000 X 80% = $136,000 (20% down payment + $10,000 seller assist). You should also know that several closing costs will also increase because title insurance, transfer tax, per diem interest, origination/discount point(s)/fees, etc. will increase because these costs are based on either the mortgage amount or sales price. I drew up an example comparing a sales price with a 6% seller assist against the same sale without the seller assist (lower purchase price) to illustrate the difference. This example is based on typical Pennsylvania closing costs, but the theory will apply to all states.

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gmakerley · Posted: Fri Jan 08, 2010 10:36 am Post subject:

even though the sales price is increased, as would be the corresponding loan amount, a borrower benefits from having a seller pay closing costs. the original note may be slightly higher than with a lower sales price/loan amount, but the benefit of having costs paid far outweighs the difference in payments.

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6% Sellers Assist?