A quick guide for using seller concessions when buying a home; St. Louis Mortgage Interest Rate Update

What are sellers’ concessions?

A seller concession can be any negotiation where the seller, builder, developer, salesperson or any interested party gives a credit to the borrower at closing.   The seller concession can help lower or eliminate the amount of money a borrower is required to bring to the closing table.  Seller-paid concessions, when used properly, can mean the difference between closing a home sale and losing one. Seller concessions have limitations based uponthe loan program.  Conventional and government backed loans each have specific requirements. Consult with your Mortgage Banker to ensure compliance with the guidelines of the loan program you intend to utilize.

Typical use of seller concessions:

  • Seller pays some or all of the closing costs. Borrower has more money available post settlement for home expenditures and maintenance.
  • Seller pays points to lower the borrower’s interest rate reducing the monthly mortgage payment. Lower payments reduce the debt-to income ratio and aids in lender loan approval.
  • Avoiding private mortgage insurance (PMI).  Seller provides enough credit at closing to eliminate PMI.

St. Louis MORTGAGE INTEREST RATES for August 22, 2012:

  • Conventional 30-Year Fixed 3.375%/ 3.428% APR
  • Conventional 15-Year Fixed 2.75%/ 2.844% APR
  • Conventional 5/1 ARM 2.500%/ 3.335% APR
  • FHA/VA 30 Year Fixed 3.250%/ 3.332% APR
  • Jumbo 5/1 ARM 2.750%/ 2.427% APR
  • Jumbo 15 yr Fixed 3.375%/ 3.630% APR
  • Jumbo 30 yr Fixed 4.750%/ 5.010% APR

*The above mortgage rates are based upon an 80% LTV, o/o single family with FICO scores of 720.

Paramount Mortgage is a locally owned Mortgage Banker celebrating our 41st year. Great rates and programs are secondary to what is most desired in a lender relationship: Integrity, Communication and Customer Satisfaction. Be to check out our website: www.paramountmortgage.com

For more information or if you have questions on mortgage rates you may contact me by phone at my direct line, (314) 372-4319, email at rfishel@paramountmortgage.com or you can visit our company website at http://www.paramountmortgage.com.


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