Khov American Mortgage - playing with rate and closing costs ? (loan officer, credit)

[asnssf]

ok. this is my case: We are about to close our 2nd house in chesterfield. Earlier we had rate locked @ 6.125 with JP chase.

Our 1st house will be rented out for 1750$, so getting mortgage was not an issue.

Now loan officer is telling that, JP is following Fenni Mae rule for 2nd home mortgage and needs 6month payment as deposit for 1st and 2nd house (for example, our 1st house payment is 1500$ [6*1500=9000] and 2nd house payment will be 2500$ [6*2500=15000], so we have to show 24000$ balance (apart from our downpayment) to qualify for the earlier JP chase mortgage. So we couldn't get into that deal.

Today he says, he can get the loan with a new bank and lock again @ 6.75% and 5850$ credit towards closing costs.

**** we have to go with Khov mortgage to get 80K discount on the house price****

Khov mortgage is supposed to give as FEE free mortgage (Application Fee , Commitment fee , Under writing Fee, processing fee, doc preparation fee, final inspection fee, tax service fee all will be 0$)

What do you guys/gals think ?

[M3 Mitch]

Not familiar with the company but Googling "Khov mortgage" brings up some interesting sites. Looks like not everyone who has dealt with this company is glad they did.

[asnssf]

They are part of K. Hovnanian builders. There are few links in ripoff report abt their construction and mold. but very few abt Khov mortgage.

Originally Posted by M3 Mitch

Not familiar with the company but Googling "Khov mortgage" brings up some interesting sites. Looks like not everyone who has dealt with this company is glad they did.

[GMU]

Originally Posted by asnssf

**** we have to go with Khov mortgage to get 80K discount on the house price****

Are you sure? Is that the amount in "free options" you got on the home?

The only amount that should be restricting you to them is the amount they offered as free closing costs, if you go with the in-house broker. And even that, you could have rolled into your free options if you knew you probably didn't want to use their in-house broker.

[asnssf]

No, if we use Khov mortgage we will get 80K discount on base price itself.

Originally Posted by GMU

Are you sure? Is that the amount in "free options" you got on the home?

The only amount that should be restricting you to them is the amount they offered as free closing costs, if you go with the in-house broker. And even that, you could have rolled into your free options if you knew you probably didn't want to use their in-house broker.

[rcarrillo]

Originally Posted by asnssf

No, if we use Khov mortgage we will get 80K discount on base price itself.

And that is where they have you.... there is never a "free lunch". That is how it works with many builders, if you want their "upgrades and incentives" you need to work with their lender, attorney and/or title company.

Sometimes that is fine, but often you aren't getting the best service, rates, fees, etc. They know you don't have the freedom to shop around and you are not their primary customer, the builder is. As long as the sale closes and the builder gets paid they are happy.

[SmartMoney]

Fannie, Freddie and FHA all restrict the use of rental income to offset your PITI. In all fairness to Khov's lender, I am willing to bet these new rules weren't even a whisper. So, to answer your question, there has been a legitimate chance.

They need to find pockets of portfolio money. The problem is w/ portfolio money that doesn't follow Fannie and Freddit, those banks are feeling the credit pull-back worse than most and pricing their loans higher than the rest of the world. Perhaps with this new liquidity initiative Paulson announced today, we may see an improvement on portfolio rates.

Ask him what bank. If he won't answer, send a certified letter requesting the information. We can try to determine if they are gouging you and for how much. FWIW, these builders have been hammered and challenged about their practice of tying incentives to using their lender. One builder is already being investigated.

The change in guidelines is a legitimate change, but the opportunity to take advantage of you is very great.

[asnssf]

I was told that only USBank has no restrictions on the 2nd home mortgage or doesn't follow Govt rule.

yes, I can shop around. if other's rate is .375 lower than khov quote, they will be pricematching..

[SmartMoney]

Well, it sounds like you need to find a 6.375% quote to get your rate down.