Can a Seller Pay for Your Closing Costs?
Heritage Home Loans
Heritage Home Loans Spokane, WA
Published on July 9, 2018
Spokane Home Loans, Home Loans, Mortgage, Seller Paid Closing Costs

Can a Seller Pay for Your Closing Costs?

The short answer is yes. With all of the standard mortgage programs, there is an option for the sellers to pay for some or all of your closing costs. The amount varies based on the loan program and in the case of a Conventional loan it would vary based on the amount of down payment you use. Below is a list with the amount of seller paid closing costs allowed with each loan program.

FHA

With an FHA loan, the sellers are allowed to pay up to 6% of the buyers closing costs.

VA

On a VA loan the sellers are allowed to pay up to 4% of the buyer’s costs. There are some situations in which the seller can pay a little more. It would be worth discussing these options with your lender and Realtor.

Conventional Loans

If you put less than 10% down on a home purchase the sellers are permitted to pay 3% of your costs.

If you were to put down 10% all the way up to 25% the sellers can pay up to 6%.

Anything greater than 25% and the sellers can pay up to 9% of your closing costs.

USDA Loans

With USDA Loans the Sellers can pay up to 6% of your closing costs.

Keep in mind these are the maximum amounts the sellers are allowed to pay. The typical amount seems to be about 3% of the closing costs will be covered by the sellers when added to the contract. In a seller’s market, it can be more difficult to get costs included without offering a higher amount to purchase the home.

As a buyer, you will need to keep in mind that sellers concessions are only able to cover your fees for closing the loan with your lender. The down payment isn’t permitted to be paid by the sellers.

Discuss this with your real estate agent and lender.

Until next time!

Heritage Home Loans
Heritage Home Loans Spokane, WA
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