Higher or lower purchase price?

[Jason L.]

I am about to close on a property where a large amount of seller credit was negotiated with the purpose of buying discount points on the mortgage. The bank is only allowing a certain amount of seller credit to be financed (2% of the purchase price) and the remaining amount of seller credit is reducing the purchase price causing the loan amount to be less than I originally expected. I am considering the following options:

1. Reduce the purchase price and seller credits to the break even point of where seller credits equals 2% of purchase price. Any pros or cons with a lower purchase price other than a smaller seller credit amount (by a few hundred dollars?)

2. Increase the purchase price as much as possible to squeeze a few extra hundred dollars out of the 2%. If so, would it also increase the amount of deductions I can take and possibly reduce the amount capital gains taxes in the future?

3. Leave situation as is, but doesn't seem like this would be the most optimal scenario.

Thanks!