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Old 07-25-2013, 08:24 PM
 
6 posts, read 15,331 times
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Hi-

Has anyone built a new home with True Homes or Ryland or something of that nature?

I am not thrilled with the builders lender quote and I am obligated to apply for a mortgage with them but am not obligated to use them.

No other brokers/banks will engage with me because my home is due to be done end of December/January.

If you didn't use your builders lender how did you know when to apply for your mortgage?
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Old 07-25-2013, 08:35 PM
 
3,806 posts, read 8,269,335 times
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Builder's Lenders tend to siphon funds back to the builder, and sometimes you only get the "incentives" if you use their lender.

Which completely exposes them as frauds. There are no incentives, it's all baked in.

If I were you I would seek a lender through word of mouth: friends/family. I would not go online and put my information in any website, as they will "shotgun" your information to 3-4 times as many lenders as they claim, your phone and email will get blown up, and you will truly regret having applied online.

Regarding the time frame, for instance, all my business is purchase, lots of it new builds, but I can't do a 6-month lock - if I could, the rate would be 2% higher than anything we are seeing now. I don't know of many companies that will lock for longer than 60 days (with a decent rate).
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Old 07-26-2013, 05:15 PM
 
Location: Phoenix, AZ > Raleigh, NC
16,490 posts, read 21,294,367 times
Reputation: 27297
Quote:
Originally Posted by Pfhtex View Post
Regarding the time frame, for instance, all my business is purchase, lots of it new builds, but I can't do a 6-month lock - if I could, the rate would be 2% higher than anything we are seeing now. I don't know of many companies that will lock for longer than 60 days (with a decent rate).
Except when you use the builder's lender, they can do longer locks. Sometimes up to 6 months. We closed with Toll Brothers in Jan, 2013 and had a 4.5 month lock. We had one free float down within 30 days of closing. If we chose to have Toll pay for the lock, our rate was increased by 1/8th of a point. Or we could pay for the lock ourselves and still get the lowest rate. If I recall, the rate lock was less than 1% of the total loan amount.

We did compare the closing costs with an outside lender, and in our case, the builder was cheaper. And used to sell mortgages, so I can read a HUD.
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Old 07-27-2013, 09:51 AM
 
Location: MID ATLANTIC
8,152 posts, read 20,033,970 times
Reputation: 9391
Quote:
Originally Posted by Pfhtex View Post
Builder's Lenders tend to siphon funds back to the builder, and sometimes you only get the "incentives" if you use their lender.

Which completely exposes them as frauds. There are no incentives, it's all baked in.

If I were you I would seek a lender through word of mouth: friends/family. I would not go online and put my information in any website, as they will "shotgun" your information to 3-4 times as many lenders as they claim, your phone and email will get blown up, and you will truly regret having applied online.

Regarding the time frame, for instance, all my business is purchase, lots of it new builds, but I can't do a 6-month lock - if I could, the rate would be 2% higher than anything we are seeing now. I don't know of many companies that will lock for longer than 60 days (with a decent rate).

I couldn't disagree with you more. Why? I am a preferred lender of half a dozen mid-sized builders and an alternate go-to lender for 2 major builders, on loans their in-house guys can't do.

New homes are not listed in the various MLS systems, typically, one of each style home is put into the computer. This means the appraisers are dependent up the builder's staff to dig out options of closed comps, as well as, HUD I's. A designated lender can have one or two appraisers in one subdivision. So, when the builder gets 10 calls from 10 different appraisers, it bogs them down and costs them man hours. Add to the fact, most loan officers do not know the required certifications and documents needed for VA, FHA, AND USDA new construction homes, let alone when to order the appraisal or how to order an appraisal with inspections. Builders wind up doing the bank's paperwork. Loan officers will call and say, okay, we have your appraisal back and we need a warranty - completely ignorant it's not a 2-10 they are looking for, but a specific HUD form (92544) signed by the builder. I could go on and on, but there are valid reasons for keeping the loans in one place.

Not being able to apply until 60 days out is another fallacy. They just do not know how to handle a loan hanging out in their pipeline, they don't know how to code it in their LARS (Loan Application Registration System) so it doesn't look like they have left a buyer hanging for 6 months. Complete nonsense, find other lenders to help you. Almost everyone can offer a long lock, it's just very expensive. In many cases, the builder has made arrangements with his preferred lender to make it more affordable.

OP, the other lenders may be backing off because they know they can't beat the incentives. They can give you their best price (and it's likely better than the builder's lender), but they can't compete with the sunroom or whatever. The builder's lender isn't gouging you (they are kept in check with current regulations), but you aren't getting the best price out there, either. But keep them honest. Keep checking quotes from other lenders and waiving them in the builder's lender's face. I can remember taking many a quote to my manager to approve to meet the price.
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Old 07-29-2013, 02:18 PM
 
3,313 posts, read 4,599,793 times
Reputation: 1838
I would leave builder's lender as a last resort. Usually they will let you lock you rate for extended period of time. Who knows what's going to happen to rated by the end of this year?

My credit union locks the rate for 90 days. Other lenders I talked to were from 30 to 60 days. I would start shopping 1,5 months prior to proposed closing.
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Old 07-29-2013, 03:00 PM
 
3,806 posts, read 8,269,335 times
Reputation: 4948
Quote:
Originally Posted by SmartMoney View Post
I couldn't disagree with you more. Why? I am a preferred lender of half a dozen mid-sized builders and an alternate go-to lender for 2 major builders, on loans their in-house guys can't do.

New homes are not listed in the various MLS systems, typically, one of each style home is put into the computer. This means the appraisers are dependent up the builder's staff to dig out options of closed comps, as well as, HUD I's. A designated lender can have one or two appraisers in one subdivision. So, when the builder gets 10 calls from 10 different appraisers, it bogs them down and costs them man hours. Add to the fact, most loan officers do not know the required certifications and documents needed for VA, FHA, AND USDA new construction homes, let alone when to order the appraisal or how to order an appraisal with inspections. Builders wind up doing the bank's paperwork. Loan officers will call and say, okay, we have your appraisal back and we need a warranty - completely ignorant it's not a 2-10 they are looking for, but a specific HUD form (92544) signed by the builder. I could go on and on, but there are valid reasons for keeping the loans in one place.

Not being able to apply until 60 days out is another fallacy. They just do not know how to handle a loan hanging out in their pipeline, they don't know how to code it in their LARS (Loan Application Registration System) so it doesn't look like they have left a buyer hanging for 6 months. Complete nonsense, find other lenders to help you. Almost everyone can offer a long lock, it's just very expensive. In many cases, the builder has made arrangements with his preferred lender to make it more affordable.

OP, the other lenders may be backing off because they know they can't beat the incentives. They can give you their best price (and it's likely better than the builder's lender), but they can't compete with the sunroom or whatever. The builder's lender isn't gouging you (they are kept in check with current regulations), but you aren't getting the best price out there, either. But keep them honest. Keep checking quotes from other lenders and waiving them in the builder's lender's face. I can remember taking many a quote to my manager to approve to meet the price.
I didn't say you can't apply until 60 days out. I said rate locks over 60 days are not the best terms. And I stand by every sentence I wrote.

And yes, if you are doing what you say, you are likely part of a joint venture wherein the lender is getting a piece of the lending revenue, and likely monies from the title company as well. The fact that they dangle closing costs or "upgrades" over buyer's heads causes buyers to just go with the builder's lender. It has zero to do with the buyer's confidence in the lender as a sole entity.
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Old 07-29-2013, 03:31 PM
 
Location: MID ATLANTIC
8,152 posts, read 20,033,970 times
Reputation: 9391
Quote:
No other brokers/banks will engage with me because my home is due to be done end of December/January.
I was referring to the OP's comment about no one speaking to him.

Not every builder's lender is a joint venture. My builders don't get anything from us, except they know they don't have to deal with someone on the outside for appraisals and forms, they don't have a "we need everything in at least XXX days before closing to meet your date. They know we will be working until the last possible minute to get that closing done, even if we are working on an underwriting condition the morning of closing. Not everyone has their hands in for the money grub, especially the back up lenders to the major builders. Buying a home is scary enough. It's worse when everyone around you is trying to convince you you're a target for getting ripped off.
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Old 08-03-2013, 09:44 AM
 
Location: Rheinland-Pfalz, Germany
693 posts, read 1,009,606 times
Reputation: 611
The biggest initial hangup for me using a builders lender is I just feel I lose a bit more control or leverage when dealing with the builder when the have a stake in my financing too. I like to keep as many things diversified so I have allies in the home builder process. No matter how good of a builder you have, fact is, its you vs. them. On my side I want to have a buyers agent and mortgage broker at minimum.
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Old 08-05-2013, 11:18 AM
 
144 posts, read 305,937 times
Reputation: 82
I am closing on a new construction home at the end of this month. I had found a lender before going to this particular builder that I was very happy with. It just so happened that this lender was the preferred lender of the builder I chose. I have been super happy with them and they have been forthcoming and upfront about everything. My loan officer gets back to me the same day and I was able to get 9000 in closing costs (6500 from the builder and 2500 from the lender). Also, my lender took pity on me and let me do a 90 day lock in for free when they usually only do 50 days. So, I got to lock in at 3.85%.

Maybe this isn't typical... but I'm very happy with the builder's lender and don't think I would have gotten the closing cost assistance if I had gone elsewhere... at least not 9k worth.
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Old 08-05-2013, 01:13 PM
 
Location: MID ATLANTIC
8,152 posts, read 20,033,970 times
Reputation: 9391
Quote:
Originally Posted by AmyinNOVA View Post
I am closing on a new construction home at the end of this month. I had found a lender before going to this particular builder that I was very happy with. It just so happened that this lender was the preferred lender of the builder I chose. I have been super happy with them and they have been forthcoming and upfront about everything. My loan officer gets back to me the same day and I was able to get 9000 in closing costs (6500 from the builder and 2500 from the lender). Also, my lender took pity on me and let me do a 90 day lock in for free when they usually only do 50 days. So, I got to lock in at 3.85%.

Maybe this isn't typical... but I'm very happy with the builder's lender and don't think I would have gotten the closing cost assistance if I had gone elsewhere... at least not 9k worth.
Good for you for speaking up about the good experience! Unfortunately, even though the positive outcomes probably outnumber the poor or unhappy outcomes 10 to 1, the happy ones rarely come back here to post. It's the disgusted buyers, the ones that feel like they've been taken advantage of that make up the majority of the posts around here.......which really is a shame because anyone buying a home very well may have negative expectations, when they need not be there.

It's funny, if you expect you are going to have a bad time or a terrible outcome, chances are that's going to be the main course.
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