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Upland California FHA Seller Paid Closing Costs

FHA seller paid closing costs have increased along with the increase in California FHA loan limits .  This has substantially improved the affordability for people wanting to buy primary residences and investment properties with FHA loans.

• With the new limits in Los Angeles County at $729,750, a buyer can get up to $43,785 in closing costs from the seller.  That means you can easily buy a median priced home in Arcadia, Claremont, Diamond Bar, Glendora,  Pomona, Walnut,…anywhere in LA County and you’ll only need to spend $25,541 of your own money.

• In San Bernardino County with the limits of $500,000, you can get $30,000 in help from the seller with you only spending $17,500 of your money.  That’s Alta Loma, Fontana, Montclair, Rancho Cucamonga, Rialto, or Upland.  You can easily find homes for under $500,000 in these cities.

FAQ

What are considered closing costs?

Closing costs are charges associated with the closing of your transaction.  They include:

• Lender fees
• Third party fees, like appraisers, credit bureaus, messengers
• Property Taxes
• Homeowner’s Insurance
• Escrow fees
• Title insurance fees
• Daily interest calculations based on when you move into your home
• The County Courthouse fees
• And, the most advantageous of all, Interest Rate Buydown

The seller is allowed to pay every single charge associated with your transaction that appears on your Good Faith Estimate, up to 6% of the purchase price.  The are separated into recurring and non-recurring closing costs.  You can get them all covered by the seller.

How do I get these costs paid?  Is it automatic with FHA loans?

Your realtor will need to include a request for the closing costs in your offer sheet to the seller.  It is negotiable, yet highly common in this market.  Automatic, no.  Foolish to pass up, yes.

What about foreclosures and short-sales?

The banks are sellers of property like anyone else.  They need to be negotiated with too.  It is fallacy to think a bank will not pay 6% of closing costs.  If you don’t ask, how will you ever know?

What is rate buydown?

That’s an in-depth subject for another day…but the short answer is, use the seller’s money to pay discount points to get a rate lower than is available in the market at that time.  If the rate your lender can get you is 5%…pay extra (discount points) to get lower than that.

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