Start with the problem you want to solve
If closing would leave little money for a move or an unexpected repair, preserving cash may matter more than a small reduction in the starting loan. If you already have a comfortable cushion, borrowing less may better fit your plans. Write down both goals before discussing an offer with your agent. Neither choice requires predicting future rates or assuming you will refinance.
How much seller credit can you actually use?
For Fannie Mae loans, seller financing concessions cannot fund your down payment or reserves. A principal residence above 90% LTV/CLTV generally has a 3% cap, based on the lower purchase price or appraisal; eligible closing costs also limit use. Excess concessions require underwriting adjustments. Exceptions exist. Confirm your program: FHA, VA, USDA and jumbo rules differ. Fannie Mae — Interested Party Contributions (B3-4.1-02) ↗
Compare the same information in writing
Ask for both scenarios using consistent loan type, term and pricing assumptions. Review the loan amount, estimated monthly payment, mortgage insurance, closing costs and cash to close. The Loan Estimate separates seller credits from lender credits and accounts for your deposit in its cash-to-close calculation. A seller credit and a lower price therefore should not be treated as interchangeable dollar-for-dollar savings. CFPB — Loan Estimate explainer ↗
Questions to resolve before writing the offer
Ask your lender which expenses the proposed credit would cover, whether other contributions affect the available limit, and what happens if costs come in below the credit. Ask your agent how each offer changes the seller’s proceeds after transaction expenses. Do not assume identical seller proceeds, seller acceptance or an appraisal supporting the proposed price. Document the agreed terms with your agent and lender before relying on a credit.
Use the calculator as a worksheet
In Build a Better Offer, enter the same down-payment percentage and your own quoted loan assumptions for each scenario. Compare buyer cash, the starting balance and the full payment. Replace the calculator’s starter fees with your estimates; its result is not an approval. For a Seattle condo, leave room in the household budget for association charges and potential assessments even when the lender’s closing-cost comparison looks manageable.
PUT IT INTO PERSPECTIVE
An example, not an offer
Hypothetical Seattle purchase, not a quote or an actual client transaction: assume 5% down, $9,000 of eligible closing costs in either scenario, no other credits or deposits, and lender approval of the structure. At $600,000 with a $6,000 seller credit, the down payment is $30,000, the starting loan is $570,000 and buyer funds total $33,000 ($30,000 + $9,000 − $6,000). At a $594,000 price with no seller credit, the down payment is $29,700, the loan is $564,300 and buyer funds total $38,700. The credit option preserves $5,700 in initial cash but leaves $5,700 more debt. Actual costs may vary with price; this example assumes them fixed to isolate the tradeoff and does not estimate a rate, payment or seller net proceeds.
Compare scenarios in Build a Better Offer →Related questions
Check the original guidance
Requirements and availability can change. Confirm the program and lender terms for your application.