Kalamazoo MI Real Estate: Did your lender tell you to ask for “Seller Concessions” when you received your preapproval letter? But, what are they you ask?
Seller concessions are a credit or contribution that a home seller provides for the buyer when purchasing a house. This contribution can help the buyer pay costs that it takes to purchase a house and get a loan. Those closing costs could be something like title insurance, processing fees, origination fees and/or loan points. It allows the buyer to purchase a home without as much cash out of pocket.
FHA rules allow sellers to credit the buyer for up to 6 percent of the home’s purchase price for closing costs, points and prepaids. That credit is what is often referred to as “seller’s concessions” or “seller’s contributions”.
Please let us know if your lender said you needed them. And, if so, please also let us know the amount of the seller concession we should ask for when we help you write an offer once you find the house you want to purchase.
Looking forward to helping you meet your housing goals!