Here are the three types of loans your sellers can pay for you.


Today I'm here to talk about the concept of seller concessions, but before I get to that, I’d like to express how thankful we are to all of the people who trusted us this year with their real estate goals, and we look forward to serving you in an even greater way next year. 


Going back to the topic of seller concessions, essentially, a seller concession is an amount that a seller can pay to the buyer for their closing costs and prepaid items. From 2019 to 2021, they were almost nonexistent, but now they are very common. Here are three different types of loans the seller can pay for:


1. Conventional loan. If the buyer is putting down 10% or less, the most the seller can contribute is 3%. That is enough to cover all closing costs such as prepaid homes, and home warranties, and even leave some left over for a rate buydown in most cases. While rare, if a buyer puts down 25% or more, the seller can contribute up to 9%.


"The VA loan is the most special of all loans."


2. FHA loan. The seller can contribute up to 6% towards all of the buyer's closing costs, prepaid down payments, and rate buydowns. In addition, it can be used toward paying the upfront mortgage insurance, which is an excellent way to use any money left over.  


3. VA loan. This is the most special of all loans for many reasons. It's meant for veterans, there’s no down payment, and the seller can contribute 4% above and beyond normal closing costs and prepaid items. The seller can pay for all the closing costs, a moderate rate buydown, and give 4%. Also, it can go toward paying the borrower's credit card, auto loan, student loan, or any other debt that the veteran may have. 


We would love to help you negotiate a contract and help you with your financing in 2023 and beyond. Give us a call or send an email. We’d be happy to help!