1. What is seller’s assist? Seller’s assist is a way for the buyer to finance all or some of their closing costs and escrows. The escrow account is the money collected, by the lender, to pay the buyer's taxes and insurance. Closing costs and escrow payments both make up settlement charges. Settlement charges determine the total amount of cash required to close. Thus, seller’s assist allows you to finance a certain percentage of the settlement charges into your new loan.
2. Why is this advantageous? Depending on your location and purchase price, it could be common to experience settlement charges over $10,000. However, in today’s market, it only costs approximately $5 a month for every $1,000 you borrow. Many borrowers would prefer to keep $10,000 in their pocket, if the cost is only $50 a month.
3. Who would this be a good fit for? It’s a great fit for anyone who either doesn't have the cash to close without it, or who would like to keep the money they have for other things while having a minimal impact on monthly payment.
4. Are there restrictions? All loan programs allow seller’s assist. However, there are in fact restrictions for different types of properties and loans. For instance, the maximum seller’s assist for investment properties is 2%. A primary property can get anywhere between 3% to 9%. A government loan can get up to 6%. A conventional loan allows anywhere between 3-9%.
One more thing to add: just because it’s allowed, doesn’t mean you can get it! It depends on the market. There are factors out of your control that affect seller’s assist. That’s why it’s so important to work with a great Realtor and mortgage lender. We work together to try to negotiate this for you if it is something you need.
If you have any questions or suggestions for future videos, give us a call or email today!
No comments :
Post a Comment
Note: Only a member of this blog may post a comment.