Seller credit calculator

How much credit to ask for - and whether it beats a price reduction.

Asking the seller to cover closing costs is often a better deal than asking for a price reduction of the same amount. A $10,000 credit puts $10,000 of cash in your pocket today. A $10,000 price reduction saves you about $50/month on a 30-year loan. Different problem, different answer.

But there are limits. Conventional loans cap seller concessions at 3% of the price under 10% down, 6% under 25% down, and 9% above 25%. FHA caps at 6%. VA caps at 4% (but only on certain items). USDA caps at 6%. And the credit can never exceed your actual closing costs.

Worked examples

Real numbers for common scenarios. These are estimates - your final closing disclosure will reflect the exact fees your specific loan and property require.

Scenario

$400,000 conventional, 5% down. Asking for $12,000 in concessions.

Inputs

Sale price: $400,000
Loan type: Conventional, 5% down
Concession cap (3%): $12,000

Estimate

Maximum seller credit allowed: $12,000
Estimated closing costs: $11,400
Usable credit (lower of the two): $11,400

Conventional limits concessions to 3% of price when down payment is under 10%. The remaining $600 of asked credit cannot be applied.

Run your own numbers

The calculator gives you the same itemized breakdown for any price, down payment, loan type, and location.

Open the calculator

Frequently asked questions

Is a seller credit better than a price reduction?+

Almost always, if your goal is to lower out-of-pocket cost. A $10,000 credit reduces your closing wire by $10,000. A $10,000 price reduction reduces your monthly payment by ~$53 (at 7% on a 30-yr) and your loan amount by $10,000. If you'd rather have lower payments forever, take the price reduction. If you want cash at closing, take the credit.

Can I keep leftover seller credit as cash?+

No. The credit can only cover actual closing costs and prepaid items. If the seller agrees to $10,000 but your closing costs are $7,500, only $7,500 is applied - the remaining $2,500 stays with the seller (or you can negotiate it as a rate buydown).

What is a 2-1 buydown and how is it funded?+

A 2-1 buydown reduces your interest rate by 2% in year 1 and 1% in year 2, then the rate jumps to its full level in year 3. The seller funds it with a credit at closing - typically 2-3% of the loan amount. It's worth doing if you expect rates to drop (you'll refi out before year 3) or your income to grow.

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All numbers shown are estimates for planning purposes. Closing costs, taxes, and fees vary by lender, title company, county, and individual transaction. LoanElk is not a lender, broker, or financial advisor. Your final Loan Estimate and Closing Disclosure are the authoritative figures.