Unable to use all of my seller's credit?!?!?! Received closing disclosure.

[Lovelygal31]

So attached is my closing disclosure. It looks ok to me. Do you guys see any issues? My only concern is the seller is giving us $11800 towards closing costs and prepaid items. The seller credit amount applied is only $9952.69. My lender said that he will lower my interest rate from 4.375 to 4.0 to accommodate. Does that make sense?

What else can the seller credit be applied to??

Thanks!

[Lovelygal31]

[Lovelygal31]

And yes, IL property taxes are that high. 

[kc0039]

Yes you can use all of your seller's credit. Looks like an FHA loan. They haven't even given you the RE tax credit yet. I don't think that's the final CD. How did you get 4.375%? I was looking at 4.625% for mine. Also, if you're closing on 06/29, taxes are $9,627.24/year, you should be able to receive a RE tax credit of $9,574.49. You'll probably get cash back around $2,000 which can be given to you since you put a deposit of $3,500.00.

[Lovelygal31]

I'm not sure how I got the 4.375%, that was the rate we locked at when I got my conditional approval. My lender said he was going to lower it to 4% before closing.

What exactly is the RE tax credit? My lender never said anything about it?? 

[Anonymous]

Your lender is probably going to use points to reduce the interest rate from 4.375% to 4.0% to use the rest of your seller's credit. At least your lender is smart enough to do this. Mine was an idiot and actually refunded the seller the credit. 

[homeloanexpert]

Your CD appears to be an early one so the final number will sharpen. The LO can lower the rate and eat up any of the unused funds, but know it will start the 3 waiting period over.

[Anonymous]

Yes, what is an re tax credit?

[kc0039]

Sorry. RE tax credit is the Real Estate tax credit. If you're in a state where real estate taxes are getting paid in arrears, you get credit for the amount of time the sellers have lived in the home from the beginning of the year until closing date. For example, taxes are $6,000  and you close on June 1st. 5 months and 1 day has past, but for this example we will use 5 months. The monthly tax is $500. Multiply that by 5 and you get the number $2,500. Sellers will have to give $2,500 in tax credit to the buyer because they have lived in the home for the past 5 months. This will bring down your closing costs as well.