First-time home Buyers, or anyone who finds it difficult to come up with the cash necessary to pay the various closing costs, have an option to finance those costs. It’s called a “Seller Concession.” Essentially, you and the Seller agree on a sale price for the property, but you write the offer for an amount in excess of the agreed-upon sales price, but not more than 6% of the sales price. The mortgage is written at the inflated price, and at the closing table, the Seller “gives” that amount back to you. It goes exclusively toward paying your closing costs. The Seller has no risk, since the give-back is a “loss” and not taxable. As for the Buyer, you are now financing slightly more than the purchase price, but it saves you needed pocket money to start life in your new home. Ask your lender for details on how to write an offer using a “Seller Concession.”
