Save Money on Florida Mortgage: How to Have the Seller Pay Closing Costs

Especially in this buyer’s market, it’s become common to ask the seller to chip in on your purchase.

One way in which you can save a decent chunk of money on the transaction is to have this individual pay some or all of the closing costs.

If you wish to ask for such an incentive, keep in mind a few simple rules. On conventional Florida home loans, you can only ask the seller to pay non-recurring costs, not prepaids or items to be paid in advance. If you’re putting ten percent down or more, the most the seller can contribute is six percent of the purchase price. If you are putting less down, the most the seller can contribute is three percent.

On VA loans, you can ask the seller to pay everything. This is called a “VA No-No,” meaning the buyer is making NO down payment and paying NO closing costs. It’s wise for the seller to put a ceiling on the amount they will pay, just to make sure no one gets carried away.

On a FHA Florida mortgage, you can also ask the seller to pay everything. However, the buyer must have a minimum three percent investment in the property, whether that is applied toward down payment, closing costs, or prepaids. The three percent can be from their own pocket or a gift from a family member.

It’s all helpful to keep in mind given the current market. Buyers should feel confident asking for incentives and taking advantage of the leverage they possess.