What incentives can you ask for, when purchasing a home!
If it is a buyer's market where you live and you're looking to buy a home, you are in a strong position to negotiate for lower prices and incentives.
Typically lenders follow this rule: If you are putting ten percent or more down, you can ask for up to six percent of the price of the home. If you are putting less than ten percent down, you can ask for three percent of the price. These credits could be used to buy down your interest rate. Get pre-approved first so you can check with your loan officer on guide-lines set by specific lenders.
Nothing guarantees you will get everything you ask for, but today’s sellers are generally willing to negotiate and give you something.
The next thing you should do is make an offer and ask for those incentive funds to be applied toward your non-recurring closing costs. By applying the incentives toward your closing costs, you lower the amount of out-of-pocket cash you need to close the deal. Otherwise, you would have to come up with a down payment and the closing costs.
There are two types of closing costs: non-recurring costs and recurring costs. Non-recurring costs are things like points and fees that you only pay once and never pay again. Recurring costs are things like insurance and property taxes that you continue paying over the time you own the home. Most loan programs only allow you to apply incentives to pay non-recurring costs. FHA and VA loans are exceptions.
A professional real estate agent and a good loan officer can save you thousands on dollars on your next purchase transaction.
For expert real estate advice, contact Chris Shastri at Remax Accord at 925-997-7653.