1. The home and the loan
From your offer and your pre-approval.
2. The seller's money
The amount in your contract, and what your lender quotes for it.
What the seller's money does for you
With no seller money, the example loan of $320,000 at 7.4% runs $2,216 a month in principal and interest. Here is the same $10,000 used four ways.
| After | Lower price | Permanent | 2-1 | Closing costs |
|---|---|---|---|---|
| 1 yr | $10,737 | $2,084 | $7,432 | $10,000 |
| 3 yrs | $12,188 | $6,271 | $10,000 | $10,000 |
| 5 yrs | $13,607 | $10,477 | $10,000 | $10,000 |
| 7 yrs (yours) | $14,986 | $14,689 | $10,000 | $10,000 |
| 10 yrs | $16,969 | $20,978 | $10,000 | $10,000 |
| 15 yrs | $19,978 | $31,151 | $10,000 | $10,000 |
"Ahead" counts payments saved, plus how much less you owe on the loan, plus cash you didn't have to bring to closing, compared with the same purchase and no seller money.
How the math works
- Payment. Principal and interest only, on a fixed-rate loan. Taxes, insurance, HOA dues, and mortgage insurance are left out because they barely move between the four choices.
- Lower price. The price drops by the credit amount and your down payment stays the same in dollars, so the loan is smaller by the full amount.
- Permanent buydown. The credit pays discount points. One point is 1% of the loan amount. The payment uses the rate your lender quotes for those points.
- 2-1 or 1-0 buydown. The seller's money goes into an account that covers part of each payment early on. The cost is the gap between the full payment and the lower payment, added up month by month. Anything left over can go to closing costs. From year 3 (year 2 for a 1-0) you pay the full note rate.
- Closing costs. The credit lowers the cash you bring to closing. Your payment doesn't change.
- Ahead after a number of years. Payments saved, plus the drop in what you owe at that point, plus closing cash you kept.
How much a seller can put in
Limits on seller money for a home you'll live in. Your lender applies the exact rule for your loan.
| Loan | Limit |
|---|---|
| Conventional (Fannie Mae) | 3% of the price with less than 10% down, 6% with 10% to 25% down, 9% with more than 25% down. Points and buydown money count. The credit can't be more than your closing costs. |
| FHA | 6% of the sales price, covering closing costs, prepaids, discount points, and permanent or temporary buydowns. |
| VA | 4% of the home's reasonable value for concessions such as temporary buydown money and prepaid taxes and insurance. Normal discount points and the buyer's usual closing costs don't count toward the 4%. |
On a temporary buydown, Fannie Mae and FHA both qualify you at the full note rate, not the lower first-year rate. Plan your budget around the year 3 payment.
Before you write the offer, ask your lender for these
- Two quotes on the same day: the zero-point rate, and the rate with the seller's credit spent on points. Put both in the boxes above.
- The cost of a 2-1 buydown on your loan amount, and how much of the credit would be left for closing costs.
- Your seller contribution limit for your loan type and down payment, so the contract doesn't ask for money underwriting will cut.
- Your total closing costs, so a credit meant for closing costs fits inside them. In Florida that includes the doc stamps and intangible tax on the new mortgage.
- The break-even month on the points, in writing, next to how long you plan to keep the loan.
Selling too? A price cut and a credit of the same size don't cost a seller quite the same. The Seller Net Sheet Estimator shows both side by side.
Seller credit worksheet (save or print)
Download the printable worksheet (PDF)One page per offer. Bring it to your lender call.
The loan
- Price: $________ Down payment: $________ Loan amount: $________
- Loan type: Conventional / FHA / VA Zero-point rate: ______% Date quoted: ________
The seller's money
- Credit amount: $________ My program limit: $________
- Rate with the credit as points: ______% Points: ______
- 2-1 buydown cost: $________ Left for closing costs: $________
- My closing costs: $________
Monthly principal and interest
- No credit: $________ Lower price: $________
- Permanent buydown: $________ 2-1 year 1: $________ year 2: $________
My call
- Years I expect to keep the loan: ______ Option ahead at that point: ____________
- Wording for the offer, checked with my agent and lender: ______________________________
Educational estimate only. This page is not a Loan Estimate, a rate quote, a lock, or an offer of credit, and it is not tax or legal advice. Rates and points change daily and depend on credit, down payment, property, loan type, and lender. Example rates are labeled and come from public sources: the 7.40% is the Freddie Mac Primary Mortgage Market Survey average for Oct 15, 2026 (a national average, not a zero-point quote), and the 6.75% bought-down rate is the example in Yahoo Finance's Oct 17, 2026 report on seller-paid buydowns. Seller contribution limits come from the Fannie Mae Selling Guide (B3-4.1-02, B2-1.4-04), HUD Handbook 4000.1, and VA Pamphlet 26-7, chapter 8. Your contract, your Loan Estimate, and your Closing Disclosure control the actual numbers.
On Target Mortgage, LLC · NMLS #2629561 · Equal Housing Opportunity · Orlando, FL