Question
Home loan from the builders recommended ?
I am looking at a new home constructions and the builder is D.R.Horton Chicago. They say that if we buy homes from one of there communities and take the home loan from there own financing affliate(DHI Mortgage), then they will give 20-30K off the list price. I checked with the listing agent and they said approximate rate is 4.75% with them. 1) Is it always good to get a home loan from there recommended mortgage, so we can get the 20-30K OFF the list price ? 2) Lets say if another lender XYZ is giving 4.75% and this same builders lender(DHI) is giving for 4.75% then is it worth going with the DHI as we will be getting the 20-30K OFF the list price of the home we are buying ? 3) Is there any catch in the offer ?
7 months ago - 3 answers
Best Answer
Chosen by Asker
Some things to consider: a. is $20-30K off the list price really that much lower than other builders would charge for the same house? Get more quotes, it should be one heckuva buyer's market right now. b. read all the fine print and make sure every aspect of the loan is the same as other lenders. For example, are both loans zero points? What are the closing and document fees for each loan? These charges can make a huge difference. c. Does the builders' loan have prepayment penalties? Avoid these like the plague. d. How is your credit rating? If less than about 720 or so, you may have to pay higher interest rates from one lender or another. The amount of your down payment also affects the int. rate. e. are both loans the same term? (15 or 30 years) int rates vary by term. It may indeed be a great deal, just be very careful and ask a lot of questions. As importantly, have you selected the right builder in the first place? (loan or no loan). A friend told me "all builders are bad, but make sure you stay away from the horrible ones" I believe that. Check every independent reference you can find. No sense calling the references the builder gives you, that list is "stacked".
Source(s)
Just built a house with a construction loan, then refinanced it. Will never build another house.
by Woody
7 months ago
Asker's Rating: 
Other Answers
The only catch I noted was that the list price is 20-30K higher than it should be. This sounds like a classic sales tactic -- jack the price way up and then "give" the buyer a price break and let him think he is getting a great deal. You would be foolish to listen to their sales pitch. Go for the best priced deal.
by frak1a12345- 7 months ago
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by Savings- 7 months ago