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Who Can Help Me WIth Closing Costs
(presented by www.refinance-refinance.net - mortgage lenders)



By Ben Afzal

Basics

The party that usually helps you on your closing costs is the seller of the property.

When they want to make the deal happen they may offer to credit part of the proceeds of the sale to help cover your closing costs.

Why would they want to do this?

First, to get the deal done. If it is a property that has been sitting around for a while this is one way to move it in a slow market.

Secondly, the seller may adjust the price upwards to cover the closing costs.

Closing Cost Example

For example, a $350,000 transaction may have $10,000 in closing costs. The seller can increase the transaction size to $360,000 and credit $10,000 back to the buyer to cover closing costs. In this way the seller still nets $350,000 on the deal. Their net take home profit is not affected.

Be careful to make sure that the seller has the ability to cover you this way.

The property’s appraisal value is usually within a range of values (a property appraisal is not an exact answer, but the appraiser’s opinion of the most reasonable value of the property on the day of the report).

The seller may not be able to have a high enough appraisal value to justify crediting some of the transaction back to you to cover closing costs. For example, the appraisal value may not be able to go up to $360,000 for the property. In this case the seller may agree to a $350,000 price and eat the $10,000 in closing costs at a loss and net $340,000 instead.

(Article continues below)

HOME LOANS ADVERTISEMENT

In a real estate market where values are not climbing as fast or cooling you should make sure you have a good grasp of what current values are.

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This entry was posted on Thursday, October 12th, 2006 at 2:19 am and is filed under Refinance. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

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