Every Monday Morning at 8:15am, join me on my Facebook page as I sit down with a local lender, and do a live interview and talk about a Mortgage Tip that may help YOU with your next Real Estate Purchase. 

This morning I sat down with Justin Froiland from Fairway Mortgage. Listen as Justin explains the importance of researching credit repair companies prior to working with someone to build up your credit.  You can reach Justin at 605.695.1429 or justin.froiland@fairwaymc.com.  His office is located at 412 5th St., Brookings SD 57006 or on the web at www.BrookingsMortgage.com 

 Seller-Paid Closing Costs

- Good morning, everybody. Shane here from the Brookings Home Team powered by Century 21. 8:15, no technical difficulties today, so-- We got good connection.

- Made it happen.

- Yes, we did, good connection here today. Right on the dot, 8:15, Monday morning. That means it's Monday Morning Mortgage Tip here. Justin from Fairway Mortgage. And this topic actually came up over the weekend here.

- It did.

- And we thought, hey, let's talk about this 'cause this was stuff that I wasn't even completely familiar with, so I said, Justin, let's talk about this and see if we can, kinda, lessen the muddy waters a little bit. So with that being said, go ahead, Justin, I'll let you take it over.

- Perfect, thanks for having me this morning, Shane. This morning, what we wanted to spend a little bit of time about talking about seller paid closing costs, and the maximum amount that you can ask the seller to pay towards your closing costs, because it varies on each different type of loan program. On a conventional loan program, it's on a tiered level, so it actually depends on how much the buyer is putting down on their loan determines how good of a seller credit they can get. If they're putting up to 10% down, they can get a 3% credit. If they're between 10 and 25%, they can get a 6% credit, and if it's over 25%, they can get a 9% credit. And actually on an investment property, no matter how much you're putting down, you can get a maximum of 2% towards your closing costs. And that's gonna be based off of purchase price. Now the government loans are gonna be a little bit different. On an FHA and a rural development loan, they allow you to go up to 6% of the closing costs. And on a VA loan, they allow you to go up to 4% on the closing costs. So it's gonna be different on each loan program. And this is just another one of the benefits of working with a Realtor such as Shane when you're putting in your offer so you don't run into problems down the road with having too large of a credit and then having to scramble to come up with more money and things along those lines.

- And speaking of having too large of a credit. So not only can they, if you do have too much, and it covers all of your closing costs, they actually have an option--

- Correct, correct.

- For the leftover.

- Correct, because with that seller credit, the maximum that seller credit can do, it has to go towards closing costs. It can't go towards the borrower's down payment at all. And so if you have, let's say for example, just round numbers, if you have $5,000 in closing costs and you have a $10,000 seller credit towards your closing costs, you can actually use that additional $5,000 to buy your interest rate down and secure a lower interest rate on your mortgage and end up saving you a considerable amount of money in the long run.

- So it won't go to waste, guys.

- Nope, nope.

- It's not gonna go to waste. And this just happened over this weekend here on a transaction that we're working on, so, and actually, you had that happen on another transaction--

- Several over the weekend, too, yeah.

- So yeah, there's some great information. If you have more questions for Justin about this, please give him a call here. I'll have all of his information on the top, on the bottom, on the sides. Wherever your device allows you to see that. And please, as you're watching this, give us a Like, give us a thumbs up, let us know where you're coming in from, we'd always like to see that, and instant message us if you do have those questions as well if you don't want to give us a call. But wow, we're happy you're watching and feel free to tag and share this video with anybody else you think would be interested. So thanks again, Justin.

- Yeah, cool.

- So that is today's Monday Morning Mortgage Tip. We'll be back next week. Enjoy the week and we'll see you next time. Alright, guys.

- Thanks, guys.

Thinking of selling and/or moving to Brookings, Volga, or any surrounding areas? Got questions? I’m here to help! Visit BrookingsHomeTeam.com for more details!