This is a YouTube video titled "How to get Your Closing Costs covered! #closingcosts #homeloans #homebuyer" containing a detailed explanation about negotiating closing costs when buying a home. The speaker discusses the differences between lender credits and seller credits, providing examples of how each affects monthly payments and overall cost effectiveness. The content is educational and aimed at prospective homebuyers.
Accounting for closing costs is a big deal when preparing to buy a home. By default, closing costs start on the buyer's side. So if nothing's negotiated, it's the buyer's responsibility. But it's not uncommon to have the closing costs negotiated as part of the deal. There's two ways that could go, the lender or the seller. If it's from the lender, it's called lender credits. And ultimately, whatever the lender's baseline rate is, they would increase it. So for example, let's say that they increased it 0.25%. That would generate probably $1,000 or $2,000, depending on the market that given day, in seller credits. So you get $1,000 or $2,000, but that increase of a quarter percent in rates, probably 50 or 60 bucks a month more on your monthly payment. This is not the most cost effective way to do it. The seller credits probably is the most cost effective way. And here's how you do it. Let's say you were going to buy the house for 300,000. Maybe you buy it for 310. But that extra 10 grand, you ask for that back in seller credit. So it's kind of a give and take. You're buying the house for 310,000, do that. Extra 10,000 is only about 56, 50 bucks a month, just like the the lender credit option. But instead of only one or $2,000 in credit, you get $10,000 in credit. So you're stretching your money so much further with the seller credit option, and that's the best way to get your closing costs covered.
