If I purchase a home with a conventional, 5% down loan and ask to pay the PMI upfront, can I have the seller's concession pay for part or all of the PMI?
Should be able to, as long as the seller concessions don't exceed 3%. More commonly, borrowers opt for monthly PMI and use seller concessions to pay closing costs and prepaids.
Absolutely. The PMI can be paid by the seller through the use of seller concessions, however, at 95% financing you will only be able to use 3% seller concessions. With that being said in most cases, closing costs exceed 3%. You will be able to use the full 3% but if the closing costs exceed the 3% it is irrelevant whether the concessions are used to cover the PMI or other third party costs. Each case is different and understanding all of your closing costs and the maximum seller concession allowed is essential. Best of luck. If you have any additional questions feel free to give me a call at 518-536-0380.
Hard to say what % of the sales price the closing costs are without knowing sales price and the state you're in.....in many states the closing costs are no where near 3% on larger purchase prices. That being said, certainly wouldn't be room for the closing costs AND borrower paid upfront PMI in the 3% seller contribution.
Ted Rood 314-740-0004