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Old 02-07-2008, 09:42 AM
 
11 posts, read 40,707 times
Reputation: 11

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The builder has $22,000 incentives on a spec home. However, 10K of the 22K incentive is tied to using their mortgage company. The builder also says they will pay 1% loan origination fee and owner's title policy.

Is there any concern that the builder asks home buyers to use its own mortgage company? Also, the builder's mortgage company is PHMC Mortgage. Does this company has a good reputation?

Thanks for any relevant information.
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Old 02-07-2008, 10:19 AM
 
Location: Houston
241 posts, read 1,178,505 times
Reputation: 97
Many builders offer incentives for using their mortgage company. Very common.
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Old 02-07-2008, 12:17 PM
 
Location: Austin & Houston, TX
1,461 posts, read 5,598,984 times
Reputation: 425
This is common with most home builders. The company is Preferred Home Mortgage correct? Are you buying a Newmark home?
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Old 02-07-2008, 12:20 PM
 
267 posts, read 1,020,138 times
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Most times it is Ok to use a builders lender if they are giving you a good deal. Where one has to be careful is with the appraisal. If the home devalues too quickly a regular bank will not give you the money you are asking for as it is not what the home is worth. At that point you can re-negotiate the contract for a lower price. Builders are known for having the appraisers in their back pocket. This isn't so much a concern on a quick sell inventory, but can mean a lot of money over the course of a homes construction.
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Old 02-07-2008, 12:44 PM
 
5,342 posts, read 14,144,755 times
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Quote:
Originally Posted by andymit99 View Post
The builder has $22,000 incentives on a spec home. However, 10K of the 22K incentive is tied to using their mortgage company. The builder also says they will pay 1% loan origination fee and owner's title policy.

Is there any concern that the builder asks home buyers to use its own mortgage company? Also, the builder's mortgage company is PHMC Mortgage. Does this company has a good reputation?

Thanks for any relevant information.
Basically none of the builder's lender's (the one's actually owned by the builder's parent company) have a good reputation, but that does not mean they can't get the job done. You need to compare what they can offer you to what you can get "on the street" without the incentives. Often the incentives are so large that you "have" to go with their lender.
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Old 02-07-2008, 02:54 PM
 
Location: Houston, TX (Bellaire)
4,900 posts, read 13,740,597 times
Reputation: 4191
Just be careful because they tend to pump up their various junk fees to make up for what they pay towards your other fees. Also go to a bank or other broker and get a quote as they will typically charge you .5-1% higher interest than what you could get on your own. Up to you to decide if the 10k incentives is worth it.
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Old 02-07-2008, 03:38 PM
 
11 posts, read 40,707 times
Reputation: 11
Yes. I am buying from Newmark. I have heard it's OK, but not great.
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