We are in the market for a house, and have talked to a number of developers in our community. They seem to offer great incentives, but only through their preferred lender. Is this a good idea, or is there some hidden landmines we need to be aware of?
2006-08-08 19:11:06 · 10 answers · asked by rlgjr2003 1 in Business & Finance ➔ Renting & Real Estate
Yes and no. I am a mortgage broker in San Diego... there have been deals from developers that I could not touch, and others that I have beaten hands down. Do the smart thing, consult with a mortgage broker or banker and see what they are offering. Chances are, if you're getting a large incentive from a developer, you may be paying more for the loan in the back, ie. a higher interest rate or an option arm with a high margin. Compare your offers, do the math, be a smart buyer.
2006-08-08 19:33:08 · answer #1 · answered by Have_ass 3 · 0⤊ 0⤋
Since right now there is a buyer's market, you are in a good position to negotiate for yourself.
Anytime someone else is determining the lender for you, I would be suspect that "hidden landmines" exist. You'll need to compare that lender to several you find yourself, including any pre-approval you have gotten.
New Homes tend to be priced higher on the market than pre-owned homes. Compare homes in your area and work closely with your realtor to see if a new home is what you really want.
Although we know the interest rate will go up, we don't know when. Don't be rushed into anything without doing your homework.
Good luck.
2006-08-09 02:15:41 · answer #2 · answered by Anonymous · 0⤊ 0⤋
If you are talking about closing cost incentives, all developers do this. They all have their own lenders who they offer this type of incentive through.
However, there are different types of incentives when you are buying a new house. There are Design center incentives and sales incentives that have nothing to do with who your closer is.
Look into all of your incentives and look around with several developers before you buy a home from them.
A good source to utilize when you are buying a new home is JD Powers on the internet. They will give you a rating of the home builders and a customer satisfaction score.
Good luck with your new purchase.
2006-08-09 02:23:30 · answer #3 · answered by fasn8n_67 4 · 0⤊ 0⤋
Usually it's just a great relationship that's been built between the developer and the lender. You scratch our back, we'll scratch yours. I see this a lot in my community. Don't shy away of this situation. It could work out to your benefit. Ask around in your community for some feedback on both the lender and the developer. Get some GFEs (good faith estimates) from each of the lenders and compare rates, fees, etc. I hope it all works out for you. Building a new home can be a lot of fun.
2006-08-08 19:28:09 · answer #4 · answered by Meeko 1 · 0⤊ 0⤋
The builder is probably getting reduced costs from that lender. It could be very legal. Ask the builder what their arrangement is.
But please be aware of all costs, up front and at closing. Also, be able to compare them to deals offered by other lenders. Be very up front and let the prospective lenders that you are not ready to make a decision until you have all the facts and possibilities. A good lender will trust their product.
And make sure the lender uses a reputable appraiser. Get a building inspection too.
Good luck.
2006-08-08 19:18:32 · answer #5 · answered by San Diego Art Nut 6 · 0⤊ 0⤋
Sometimes they offer good incentives if you use the lender of the developer HOWEVER. per RESPA regulations, a developer can not punish or force you to use someone that you want to use.
2006-08-08 19:16:59 · answer #6 · answered by iz R 2 · 0⤊ 0⤋
Hidden Land Mine Galore!
visit DaveRamsey.com to find out what not to do.
No 20 / 80 loans - bank wins / you loss
Loans of 15 years fixed equaling one week take home pay or bank wins . We see the effects in foreclosures everyday now of people who take the banks word they qualify for an type loans, bank wins/ you loss.
Have good cash up front and be willing to walk a way if you don't like the 'real terms'.
2006-08-12 15:58:25 · answer #7 · answered by Anonymous · 0⤊ 0⤋
Make Sure Its Up To Code :)
Im Sure The Developers Are Getting Kick Backs.
2006-08-08 19:14:59 · answer #8 · answered by TRAXIC 2 · 0⤊ 0⤋
Many times Developers deal in such large bulk lending that offers could be had by the buyers of new homes... Play it safe and ask around...
2006-08-08 19:14:43 · answer #9 · answered by marnefirstinfantry 5 · 0⤊ 0⤋
I donno!!! Ask my dad, hes a broker/loan officer.
2006-08-08 19:13:44 · answer #10 · answered by Obo 1 · 0⤊ 0⤋