Closing Cost Credits Can = 6%; 2% for Investors; Commissions Too

Sellers can credit up to 6% of the sales price, in most cases, as a credit for ALL closing costs – including non-recurring and recurring fees. This includes transfer taxes. Closing cost credits should just be for “closing costs” and not for “non-recurring costs” only. Many people think closing cost credits cannot exceed 3%, but that is not the case unless the loan-to-value ratio (LTV) is 90% or more and the loan is conventional. Closing cost credits can actually go up to 9% of the sales price if the LTV is under 75%.

Closing cost credits for Investment Properties are more limited; they cannot exceed 2% of the sales price.

Realtors can credit their commissions for closing costs as well.

Tomorrow we will discuss what to do if a closing cost credit is too large.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 335646