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Closing Costs Question?
I'm doing a VA Loan, and the seller agreed to pay 3.5% of closing cost. If for what ever reason the CC is less than the 3.5% total, do I get the left over money?
Ok, I figured that, but someone was trying to tell me otherwise.
- JimLv 49 years agoFavorite Answer
No. But keep in mind that the 3.5% not only covers your closing costs, but also your prepaid interest, and setting up your new escrow account. It can also be used to pay your first year of insurance. So when you sign up for your home owner's insurance tell your agent that your bank will be collecting the premium from you at closing.
If you're still not using the full 3.5%, you have a couple options.
* Talk to your banker to see if they can use any of the money left over to "pay points" to buy the interest rate lower.
* Another option is let's say you have $1000 left over. In my opinion, you have every right to make a claim on this money. You can ask that the seller write you a personal check after closing for the $1000. You could also ammend the purchase agreement to lower the closing costs paid by the sellers by $1000 and at the same time also lower the purchase price by $1000. The bottom line ends up the same, and the seller will not say no since they have already agreed to give you the 3.5% and it doesn't affect them in any way. I'm a lender and I had a deal where we did exactly that and the sellers had no problem at all with that. We had to lower it by $1500.Source(s): Mortgage Lender
- real estate guyLv 79 years ago
NO. Read the contract. It will say something like "up to" allowable closing costs. If you only use 3%, you "lose" the other .5% at settlement.
- 9 years ago
No usually when they put a percentage in as to what they will pay that only means they won't pay over that.