Cash at close - Posted by Michelle

Posted by River City on September 25, 2006 at 15:51:28:

To do this legally, it must be in writing and disclosed to the lender, otherwise, you will be committing fraud. Mortgage fraud carries heavy penalties and punishments (money and prison) because it eventually involves the federal government. Most lenders send a statement to closing (for all parties to sign) that states all agreements between the parties have been disclosed to the lender. If, at a later time it is discovered this type of an agreement was not disclosed, the lender could prosecute you and the seller and you could receive a visit from the FBI. When sellers give back part of the down payment, it usually means the property is being sold at an inflated value.

You might want to google “mortgage fraud”.

Lenders will allow more than 3% seller concession based on the loan to value.

Cash at close - Posted by Michelle

Posted by Michelle on September 25, 2006 at 07:33:42:

I am purchasing a property from a builder who has told me he will give me cash back at close to cover my financing downpayment. I know that this is done quite a bit between investors, but how do I protect myself to ensure that i will really receive it? Is there anything we can put in writing or structure the deal to include it? Lenders will not allow more than 3% on a seller concession.