Closing cost credit vs reduction in purchase price
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So, guys closing cost credit versus a reduction in purchase price, there’s a big difference. So, you you’ve purchased a home now we’re speaking from the buyer’s perspective now. You’ve purchased a home, you’ve had your home inspection, you decided to negotiate a couple repairs. The seller wants to offer you a credit. Now there’s a big difference between a closing cost credit or a reduction in purchase price. A closing cost credit means they’re get you’re gonna realize the actual cash. So, if they give you let’s say a $1,000 closing cost credit that means you have to bring a thousand dollars less to closing which is real money for you. So, you’re gonna save that thousand dollars.
If you reduce the purchase price a thousand dollars, that money you’re not going to realize until you know your 30-year mortgage. So, it’s a thousand bucks off the purchase price amortized over your 360 payments or whatever it is and you’re not going to realize that. So, it’s going to be you know minimal dollar to a month. It’s going to mean nothing. So, when you do have a home inspection and you really want to negotiate some terms and you want some money back or the seller’s going to give you money back to repair the items that you find are deficient or whatever the credit or whatever the repair is. The seller’s unwilling to fix them so they won’t offer you credit always take the closing cost credit up to the maximum amount your lender will allow. Because that’s real cash to you that’s savings. That’s money that you don’t have to pull out of your pocket to go to the closing with.
So, you can save those money save that money for some repair and again if it’s off the purchase price it’s going to be advertised over 30 years and that’s certainly not going to help you very much. Nice and easy. Evan Russell, Russell Realty Minute. ‘EvanRussell.com’.