Most loans allow sellers to pay up to a certain percentage towards buyer’s closing costs. A lot of times this allowed percentage can cover the entire buyer’s closing costs. This can be very helpful in a number of ways. One, it allows the buyer to put more money towards a down payment which can possibly reduce or eliminate mortgage insurance. Obviously, the property has to appraise for the purchase price including any costs the Seller is paying for the buyer. Lenders will only loan on appraised value. A lot of sellers are aware that they may have to help buyers out in this regard and have priced the property accordingly. However, if the seller is willing to pay for a buyer’s loan costs it probably will impact the purchase price the seller is willing to accept. It all comes down to willing seller and buyer and the needs of both. That is where the best real estate brokers can become invaluable.
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