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What do I do with an overage of credits?

I am receiving $5100 lender credit an $3K from sellers.  Closing close are only $5k, wich we will use the lender credit (this is a FHA loan).  What happends with sellers credit.  Can I get a check? 
  • October 19 2012 - US
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Answers (9)

Profile picture for wetdawgs
Putting it towards the MIP may be  a valid use of the credit from the words in your contract.   There is no guarantee that they'll lower the contract amount by $3000, they don't have to - that would reopen negotiations.



  • October 19 2012
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Profile picture for user927296
My lender is suggesting me to put it toward the upfront MIP.  Im not 100% sure what that is, but have an idea.  I guess what my real concern was it is better for me in the long run to put it toward that MIP or to to just forgo that credit of 3K and lower my total contract amount (less 3K)
  • October 19 2012
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Profile picture for wetdawgs
The seller can only give you the $3k for costs as agreed in the contract.   If they are already covered by your negotiation with the lender, then the seller keeps the $3k.




  • October 19 2012
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First thing you do is see if the $3k will cover the UFMIP and/or if it is a little short if you are okay making up the difference.  If that is not possible or does not work out just lower the sales price $3k and forego the credit from the seller.
  • October 19 2012
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That is true. You can try to get the price lowered, but at today's low interest rates...I don't know, I think I personally would pay down the PMI or rate if they are options :) In most --if not all-- cases the seller cannot legally cut you a 3k check for unused closing cost credits. I have heard of checks being cut out for repair credits in the past, but haven't dealt with that myself. Good luck
  • October 19 2012
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Profile picture for user927296
3K from the sellers where suppose to be for closing cost. We do not need them now due to the fact that we received such a large lenders credit.  The mortgage company wants to pay down my mortgage insurance, I think is what hes getting at.  My thing is I would rather get a check back from the seller or lower the sale price 3k.  I am essentially carry an addition 3k in my mortgage over the next 30 years.  
  • October 19 2012
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Depends on the credit's purpose...is it for recurring costs, non-recurring costs, or both? I would apply the monies towards buying down the rate, personally, if that is an option for you. Speak to your loan officer.
  • October 19 2012
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Use the funds to establish your escrow account.
  • October 19 2012
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You cannot get a check back. I would check into lowering the purchase price $3000.
  • October 19 2012
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