This is a reminder that Lenders, Sellers and Realtors can credit commissions or proceeds for closing costs.
Closing Cost Credits can cover both non-recurring and recurring closing costs, including transfer taxes, hazard insurance, property taxes, HOA dues, interest and impound accounts.
Substantial recurring closing costs often make allowable credits much larger than people realize, especially if there is an impound account or substantial transfer taxes.
Closing Cost Credits cannot, however, “prepay” HOA dues, property taxes or hazard insurance beyond levels that are normally paid at escrow. People sometimes attempt to prepay such items in an attempt to eat up excess credits.
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