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I am recetly purchasing a Pulte homes SFH in Texas, they request to submit loan application to Pulte mortgage, which asked all my paperwork to apply for the mortgage except no rate locking, ONLY after they approve it, they start to build the house, I then can shopping around and if I find another lender who gives me lower rate, pulte mortgage can match it. Anyone know about this?
This is fairly standard with builders....only most won't agree to match and you will only get the "discounts" and seller paid assistance for closing, if you close with their lender. About 70% of my business is new construction, and while I'm sure the builder's mortgage company makes additional funds off the mortgages, it's really more for processing of the new construction documentation with the required government forms. The new construction lender needs to know how to prep the buyers for the twice loan approval process......once to start building, the second time with the appraisal and locking, know when to order the appraisal and when to lock in their customers. (I am with a regional bank that is known for it's portfolio products no one will compete with......so when they come to me, it's because their lender can't touch it).
You are fortunate you will have the opportunity to insure the builder's mortgage company will be competitive. I would think that is the best of both worlds.
I am not a fan of Pulte but that's a different story. Pulte wants you to get hooked into their lender so you'll feel obligated to use them. Most builders will push you to their lender who will then give you an incentive to use them.
Many times it's a good deal but many times they jack up fees to give you a lower interest rate. Very few builders say you MUST get Pre-qualified through their lender. Usually a Pre-Qual letter from another lender is sufficient to start construction.
Do you have any other options beside Pulte as a builder ? Is Highland Homes building in your area ? If so they are so much better.
I'm in a similar boat. Just signed contract to purchase a Pulte townhouse, went through the Pulte Mortgage process, which was approved, but now waiting to lock when we have a settlement date (sometime in Nov/Dec). Rakin is correct, our fee is pretty high ($5,450 origination fee for a $460K loan amount). However, they're giving us $20K in closing assistance, which is good considering the transfer tax for us here in MD is crazy (even for 1st time homebuyers).
Initial Loan amount is: $459,328
Conventional 30-yr loan (for a new construction in MD) with 20% down at a quoted rate of 3.750%Note: The quoted rate was determined back during the 1st week of June. The home will be ready for settlement in November (so here's hoping for the rate to drop further).
A) Adjusted Origination Charges: $5,450.23
-The credit or charge for the interest rate of 3.750% is included in "Our origination charge."
-No credit or charge (points) for this interest rate.
B) Your Charges for All Other Settlement Services: $23,819.44
1. Required services that we select (These charges are for services we require to complete your settlement. We will choose the providers of these services)
-Appraisal Fee: $425.00
-Tax Service Contract: $58.00
-Credit Report Fee: $62.50
-Flood Certification Fee: $15.00
-Final Inspection Fee: $150.00
2. Title services and lender's title insurance: $2,307.61
3. Owner's title insurance: $1,400.08
4. Required services that you can shop for
-Survey: $110.00
5. Government recording charges: $120.00
6. Transfer taxes (These charges are for state and local fees on mortgages and home sales): $13,062.40
7. Initial Deposit for Escrow Account (Property Taxes and all insurance): $4,043.15
8. Daily interest charges ($47.19/day for 30 days, if settlement is 11/01/2012): $1,415.70
9. Homeowner's Insurance (Hazard Premium): $650.00
$29,269.67 sounds beyond ridiculous for closing though the lender is paying $20,000 of it. However, that still leaves $9,269.67! Highly doubtful that any other lender can come close to the closing assistance at the end hence the reason why we'll probably go with Pulte Mortgage and maybe refi a few years down the road if they can't give us a competitive rate.
$29,269.67 sounds beyond ridiculous for closing though the lender is paying $20,000 of it. However, that still leaves $9,269.67! Highly doubtful that any other lender can come close to the closing assistance at the end hence the reason why we'll probably go with Pulte Mortgage and maybe refi a few years down the road if they can't give us a competitive rate.
Take your Good Faith Estimate from Pulte to a good local lender to review and see if they can match or beat. Pulte should not be giving you $20k to use their lender. That almost sounds illegal in todays world.
JMO but I don't like or trust Pulte but that's just from what I've seen in my small world.
FYI - the seller typically pays the transfer fees, so the 13k is just smoke & mirrors
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