When/how are seller concessions included into closing costs? (credit, finance, deduct)

[glenn_1000]

My seller is paying $2,000 for repairs and $875 for home warranty.

1. Do I need to notify the lender or are these recalculated on closing day?

2. Does the amount they pay get included into the settlement charges or deducted afterwards?

3. Will the $2,000 go towards the amount I bring to the table (which right now is about $1300 of the ~$6000 in closing costs. Or does it go towards the amount rolled into the finance charges that only affects the actual APR?

4. They are kicking in $875 for the warranty, but it does not cost that much. Do I keep the difference and apply towards closing costs? Do I buy the warranty myself or does the seller bring the warranty to closing?

[acegolfer]

Originally Posted by glenn_1000

My seller is paying $2,000 for repairs and $875 for home warranty.

1. Do I need to notify the lender or are these recalculated on closing day?

2. Does the amount they pay get included into the settlement charges or deducted afterwards?

3. Will the $2,000 go towards the amount I bring to the table (which right now is about $1300 of the ~$6000 in closing costs. Or does it go towards the amount rolled into the finance charges that only affects the actual APR?

4. They are kicking in $875 for the warranty, but it does not cost that much. Do I keep the difference and apply towards closing costs? Do I buy the warranty myself or does the seller bring the warranty to closing?

1. You don't have to notify the lender, if your closing agent is competent.

2. The credit from seller will be in HUD-1 item 213. This will reduce your closing cost. As a consequence, the seller will receive less.

3. It will reduce your closing cost. I don't think it affects your APR, but I can be wrong.

4. In my case, the seller bought the warranty. Your contract probably says home warranty upto $875. If so, you don't get the difference.