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My son and his fiance contracted with KB Homes last January for a new Townhome in Cary. The home is expected to be completed in early August. After not hearing from KB for several months they were just called and told that the interest rate on the mortgage went up about 1 1/2% more than they were told last Jan.When my son questioned about this he was told they should have locked in the rate. My son responded with why didn't you ask me about locking in the rate.The first salesman they dealt with is no longer with the company and their file had been passed around several times to different people. Everytime my son had tried to call to check on the status of his Townhome he always got a runaround. Now that the end is near, someone is now handling his file and asking for more money on the mortgage due to interest rate increase. Now my son is thinking he will not be able to afford the Townhome and thinks he can back out of the contract and get his $3,000 deposit back. Please someone give me some feedback on what options he has without losing this sale or backing out completely and getting his deposit back. Thanks for your help.
I actually dont have any experience with KB homes so I don't know that they have any actual mortgage company? But, they are correct to say your son should have gotten the fixed rate. Even a few months from now, the rate could go up again..and again a month or so later..or even a year later and so forth.
I am about 99.9% positive that they don't allow refunds for contracts that are broken. I did hear a horror story of someone puttin down $1,000 to hold the contract, changed their mind at the design center and lost that money. But I also think they put up a fight and got it back (food for thought). Definately have your son go through his contract with a fine tooth comb.
I went through Anderson homes for my house and the first thing we asked was if the contract money was refundable or not (it was).
GOOD LUCK!!!
I hope everything works out for your son and his fiance. That is just horrible.
PS-
I know there are some great reference books out there, but I particulary like "Homebuying for dummies". It helped me get through buying my first house, and it explained that locked rate which I got.
I'm just wondering if it wouldn't be too late for your son to go through a different mortgage company or not. Something to look into if possible.
LOL...KB homes are a big fugging joke...KB is a rip off ...as far as the 3000 earnest depsoit goes you will not get that back, its gonna come down to you buying the house or walking away from the earnest deposit. I live in northern va and i was looking a KB home a few months back near triangle town center mall, LUCKY for me they accepted a post dated check , the sales lady could not answer a single question about prices at the design center, anyways i was able to go through the whole design center process , pick out all my options, my 249,000 house just turned into a 365,000 house ...man they charge you for EVERYTHING, when i told my sales person i would not be buying that house she said ,you know there going to keep your earnest money ( MINE WAS 4,000 ) ..i called my bank and cancelled that damn check so fast....LOL....while i was down there i also drove around and found a few kbhomes neighorhoods that were finished...and they looked awful and run-down ,theres a neighborhood called Meryton, behind the sheetz off capitol blvd. that REALLY looks bad its only like 2 years old but the homes look like there 10 + years old, i guess thats from the cheap materials they use...hey what happen to the KBHOMES SUCKS.COM or KB HOMES STINKS .COM.....lol kb paid to have them removed..i think
man they charge you for EVERYTHING, when i told my sales person i would not be buying that house she said ,you know there going to keep your earnest money ( MINE WAS 4,000 ) ..i called my bank and cancelled that damn check so fast....LOL....
Smart move...wow.
We stopped in KB homes before we stopped at Anderson homes and they couldnt give us a estimated amount of upgrades they had in the models. They told us you pick out everything at the design center, etc. I was doing some of the math in my head for a house that cost $170k (which does seem reasonable) and just with the upgrades alone (which is pretty much everything) in the end the house will end up costing an additional $40-70k more. I was also thinking of the stuff we could do ourselves and how much cheaper that would be (not that much) so I ended up passing. I dont know about the other KB homes but the one we stopped at had three nice model homes to tour through, yet the office was a trailer...lol.
I don't mean to hijack your thread, but I am in similar situation.
I am planing on buying a Beazer home. To get any incentive or allownce in the design center, I must use Beazer mortgage. As of now, I know my bank offers better interst rate.
I wonder if it is possible to close using Beazer mortgage, then refinance after that?
Beazer mortgage charnge %1 origination fees, which will be paid by Beazer. I will not buy any points, so I will by only the the title and other state fees, which could be couple of thousands.
I've done just that before, financed with the builder to get their big $20,000 incentive (of which 1/2 was eaten up with origination points and other BS items that most honorable banks and credit unions don't charge anymore). Anyhow, I refinanced 2 days after we closed with my credit union, got a rate 1% lower and only paid about $700.00 in closing costs as my credit union pays for everything else. It was worth it to get the $10,000 off the house price, just a bit of a pain. Just make sure that there is no pre payment penalty with the builder's mortgage, if there is not then nothing they can do if you refinance.
KB doesn't have their own mortgage company, just an a partnership with Countrywide. That said, one can get their own financing. There are usually incentives to finance with the preferred lender, but unless he signed a contract saying he WILL finance with Countrywide, he can go elsewhere.
That said, I've never heard of anyone getting a locked rate that far in advance of closing. Not without paying out the rear for points and all that. Maybe cap lock, but even then, he would only be paying the origination fees upfront, which would all go toward closing costs anyway.
He can walk away from the contract, but he will lose the money he's put down. If he signed a contract, that's the deal, unfortunately. My suggestion would be just what 102294 did. Finish the financing with Countrywide and soon after, refinance with his bank or wherever he can get the rate he wants. Unless something drastic has happened with is credit since he purchased the home, I don't see why there would be a problem getting even a 1% discount if he went with a credit union or a long-time relationship bank.
When I saw your post I had to run and grab last Thursday's WSJ. I knew I'd read something about Beazer Homes.
"Beazer Homes USA Inc., facing a federal investigation into its mortgage-lending practices, said it fired its chief accounting officer for attempting to destroy company documents." WSJ, June 28,2007, A2
Further "Allegations of improper lending practices by Beazer's in-house mortgage company emerged in the winter, when groups of home buyers in North Carolina alleged that the builder steered them into mortgages they couldn't afford, leading to widespread foreclosures." WSJ, June 28,2007, A2
Buyer beware, I'd say.
Good luck to you!
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Wall Street Journal on Beazer Homes
