Credit request at closing

4 Replies

Hello BP colleagues,

What are the ways to receive credit at closing? I am in escrow on a duplex, conventional loan, and credit have requested is above the closing cost amount (with about 20k more). I do not want a price reduction, as the negotiated price will appraise, but rather receive a credit at closing which will use towards a few improvements. 

What are the ways to receive the credit in escrow and outside of escrow? If outside of escrow, how to legally protect myself?



@Kyle Atans

Credits at closing are essentially accounting matters. If your credits are approved, if there are extra proceeds after all the accounting then you can receive a check.

Essentially, you would be borrowing the money since it would be part of the proceeds. The lender might also throw a wrench into the process. LTV is based on the lower of the appraised or the sales price.

If you are correct about the sales price and the appraised price before the credit being close to each other, then it shouldn’t be a problem.

As @Christopher Phillips stated, just accounting. Talk to your title agent and let them know what you’re looking to do. 

If you are looking for credit back from the seller, it needed to be in your contract.

Originally posted by @Wayne Brooks :

If you are looking for credit back from the seller, it needed to be in your contract.

It seems that credit can't exceed the closing cost. Anything more than that has to stay in an escrow account and they will pay the vendors which you need to line up before closing. Anyone, that know something different?

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