For Mortgages When Purchasing Your Home, WHAT ARE SELLER CONTRIBUTIONS?"

In today's real estate market, buyers typically have the upper hand over sellers.  In this situation buyers can ask for a number of concessions including what is called "Seller Contributions".

1. But, what are seller contributions? 
2. What can seller contributions are used for? 
3. What happens to any seller contributions not used?

Seller Contributions

What are Seller Contributions? 

Seller contributions are concessions to the purchaser. These concessions are typically monetary and are typically limited to 3% of the purchase price.

What can Seller Contributions are used for?

Seller contributions that are allowed to be included in the percentage limitations by my bank, Bank of America, are:

• Funds for a temporary interest rate buydown
• Origination fee and discount points
• Normal buyer closing costs (i.e. appraisal, survey, etc.)
• Prepaid interest up to 30 days
• Commitment fee
• Hazard insurance premiums up to 14 months
• Title transfer taxes, stamps, etc.
• Attorney's fees
• Title insurance premiums
• Real estate taxes of no more than 12 months are permitted contingent upon the establishment of an escrow account at closing by Bank of America
• Seller paid one-time up-front MI or the first year's premium for mortgage insurance
  
  Note:  Title transfer fees in an area that are typically paid by the seller are not considered in seller contribution limits on conventional financing.

What happens to any seller contributions not used?

All seller contributions not used by the buyer will revert back to the seller.  So, Buyers, use up all of your seller contributions!

You can find AJ Nisen on Active Rain at Contra Costa California Mortgages.  Call AJ to talk about Mortgage Rates, Free Credit Report or visit AJ's website to use his mortgage calculator. 

Alan 'AJ' Nisen
Mortgage Loan Officer
Email: aj.nisen@bankofamerica.com
http://mortgage.bankofamerica.com/ajnisen 
http://www.activerain.com/ajn