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I applied for a loan and just gotten approved. All I need now is a house. Earlier plans was to purchase a resale home, but figured since there are new homes being built in the same area at around the same price, I would just go for a new home and use the loan I just applied for. Do most new home builders accept 3rd party loans instead of their own mortgage?
I'm a first time home buyer, so I'm new to this stuff. Thanks in advance.
I applied for a loan and just gotten approved. All I need now is a house. Earlier plans was to purchase a resale home, but figured since there are new homes being built in the same area at around the same price, I would just go for a new home and use the loan I just applied for. Do most new home builders accept 3rd party loans instead of their own mortgage?
I'm a first time home buyer, so I'm new to this stuff. Thanks in advance.
Builders don't do "buy here/finance here" because they love it, they do it to suck people in. If you have your own financing they can probably cut you a better price.
Builders don't do "buy here/finance here" because they love it, they do it to suck people in. If you have your own financing they can probably cut you a better price.
Ok, I see. I had this assumption that most new home builders would rather stick with their own lender, than use someone else's. Thanks
Ok, I see. I had this assumption that most new home builders would rather stick with their own lender, than use someone else's. Thanks
Yes, they WOULD rather use their own lender, because they make a lot more money that way, but that does not mean you should use their lender.
They artificially inflate the price of the house by let's say $10,000, then they say if you use their lender you can get $10,000 in "free upgrades." Once you sign that contract and agree to it, their lender has no incentive (competition) to offer you good rates and closing costs. There is no free lunch.
I applied for a loan and just gotten approved. All I need now is a house. Earlier plans was to purchase a resale home, but figured since there are new homes being built in the same area at around the same price, I would just go for a new home and use the loan I just applied for. Do most new home builders accept 3rd party loans instead of their own mortgage?
I'm a first time home buyer, so I'm new to this stuff. Thanks in advance.
Many builders will entice you by offering to pay your closing costs if you use a preferred lender; however, with good negotiations, it's possible to get the builder to contribute those funds to your lender.
Builders don't do "buy here/finance here" because they love it, they do it to suck people in. If you have your own financing they can probably cut you a better price.
This is only partly true in some cases. If the builder has an affiliated business arrangement -- which must be disclosed to the buyer -- then the builder would obviously make some profit.
If there isn't an affiliated business arrangement between the builder and the preferred lender, then the main purpose of this arrangement is to control the transaction. Builders have been duped by many unscrupulous 3rd party lenders who say the buyer is qualified -- but then can’t close the deal. A preferred lender would never do this, insomuch as the lender would lose out on the builder’s future business; it's all about accountability.
Yes, they WOULD rather use their own lender, because they make a lot more money that way, but that does not mean you should use their lender.
They artificially inflate the price of the house by let's say $10,000, then they say if you use their lender you can get $10,000 in "free upgrades." Once you sign that contract and agree to it, their lender has no incentive (competition) to offer you good rates and closing costs. There is no free lunch.
I agree, but one should shop lenders before signing the contract with the builder.
Thanks for the response all! This is definitely interesting.
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Accept? How about "live for"...
