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Old 08-01-2008, 03:36 PM
 
251 posts, read 1,450,165 times
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Im buying a home through centex and CTX mortgage say if i lend from them they will pay almost all my closing costs.Do they make that money up with a higher interest rate or do they make it up in some other way?
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Old 08-01-2008, 03:43 PM
 
Location: Durham, NC
1,364 posts, read 5,686,804 times
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a) they are making money by selling the loan
b) they are artificially inflating the sales price of the home - the 5k or whatever in closing costs helps you out of pocket, but it's basically just rolled into the financed amount of the mortgage, and the sales price records 5k higher than what market value might be.
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Old 08-01-2008, 03:53 PM
 
251 posts, read 1,450,165 times
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Quote:
Originally Posted by sneezecake View Post
a) they are making money by selling the loan
b) they are artificially inflating the sales price of the home - the 5k or whatever in closing costs helps you out of pocket, but it's basically just rolled into the financed amount of the mortgage, and the sales price records 5k higher than what market value might be.
Well the wierd thing is the interest rate there offering is just about the same as the other lenders.
I wonder if i refinanced with another lender say after a year am i obligated to pay that closing cost back?
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Old 08-01-2008, 03:59 PM
 
Location: Dallas, TX
253 posts, read 1,097,268 times
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I would look into the Bank of America program that offers no closing costs.
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Old 08-01-2008, 05:02 PM
 
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You're paying those closing costs somewhere. They never give them away. Builders will always make it sound like a great deal, but they're in there. Get your Realtor to find them for you.
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Old 08-01-2008, 05:27 PM
 
33 posts, read 111,657 times
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It's different for every builder, a lot of them will roll it into the purchase price of the home if you chose to do it that way.

However Centex, at least in our area, actually eats the cost and it makes no difference in the base price of the home. Their are no hidden catches other than the fact that you HAVE to use CTX to get any of their promos. It is, in effect already figured into the base price.

Unless your agents brokerage has some kind of deal with them that lets you still get all their goodies and use an alternate mortgage company.
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Old 08-01-2008, 06:19 PM
 
26,863 posts, read 42,026,216 times
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In our area most builders only did this if you went with their lender, otherwise they wouldn't do anything...but we had some who still gave us money towards closing since we bought cash.
I also know that BoA has mortgages without closing costs as my premier banking manager told me, so I would consider that option and see if Centex is willing to do something. Specially when all this mortgage mess is going on it is very good to have a second opinion or a third.
Good Luck and I have to say that when I bought from Centex,we were very happy with the process.
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Old 08-01-2008, 06:26 PM
 
Location: DFW - Coppell / Las Colinas
36,731 posts, read 40,860,537 times
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One note, everything I've read about Centex lately is they are desperate for sales & turning land into cash. You may be getting a great deal.

Most major builders are really cutting deals which makes existing home sales difficult. I worry though that some could file bankruptcy in the middle of some of their building tying up clients & earnest money.

This happened to me with a Kimble Hill developement where they owned the land.
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Old 08-02-2008, 08:01 AM
 
16,434 posts, read 20,175,665 times
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Quote:
Originally Posted by Rakin View Post
One note, everything I've read about Centex lately is they are desperate for sales & turning land into cash. You may be getting a great deal.

.
I'm hearing this more and more. Sellers and builders are desperate.
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Old 08-02-2008, 08:23 AM
 
26,863 posts, read 42,026,216 times
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I'm at this time not sure to put a down payment on a home that still has to be build, I rather would buy an inventory but you have to get a home inspector involved. I didn't do that and never regret it on the new construction homes. Even when I sold them never has real issues come up, only in one home, I needed to use the warranty for a minor thing.
But in todays market builder might have chosen cheap materials or build it as fast as they could (they already did this in '05 but they used good materials since the thought the market was still very good and the money came in quickly). I have heard of houses that wern't build as good as before, but maybe other people have different experiences, but the main issue is that if a builder goes bankrupt the warranty department is probable gone too....so better be safe than sorry.
Even the small amount of down payment can be gone and for the builder it isn't much money but for the avarage person $ 4,000 can be a lot and nobody wants to lose money of they will go to a casino and should know that more people lose money than win.
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