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Macomb County MI real estate blog

A response for Aaron Kelley – too lengthy to leave in the “notes” section

February 7th, 2009 · No Comments · fha mortgages and first time home buyers, first time home buyers, tips for home buyers, tips for home sellers

Mr. Kelley left a note on the side panel of this blog letting us know that he has his home for sale, and one of the incentives that he is using is to pay the first 6 months of a buyers mortgage payments.  Also, if a buyer can close within 30 days of an accepted purchase offer he will up that to 12 months of a buyers mortgage payments.

I think this is innovative and certainly creative and could help Mr. Kelley attract a buyer for his home.   I do however have one reservation – one hiccup- that I think could be a problem:

All incentives that are of a financial nature must be disclosed to the buyers mortgage lender.

If a buyer is purchasing the home using an FHA or VA mortgage product, the limit that the seller can contribute would be 6% of the purchase price to be used towards closing costs, pre-paids, and / or tax prorations.

For a conventional mortgage that limit appears to be 3% of the purchase price.

Buyers: Check with your mortgage lenders to see if a bonus such as what Mr. Kelley is offering can be used with your purchase.    You would not want to pay for an appraisal, and a home inspection and be out that hard earned money if your lender comes back and tells you that you cannot receive this type of bonus-incentive with your mortgage.

Mr. Kelley: If you have talked with a mortgage lender and they have said this is acceptable to them for a home buyer to receive please update us.  I would love to know that this is possible as I’m sure my home buyers would also.

Kris Wales – A partner for your real estate needs in Macomb County MI

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