Mortgage rates

 
Hi All,
I am planning to buy a New house. The Builder company is giving me an
insentive of 7,500$ on closing. If I use their mortgage company.

Do you think the Intrest rates will go down. With Fed announcing
reduction in points. Please help and let me know if I need to wait on
the mortgage or go with the builder company.

Regards,
Prasad

 
The 2 issues -- interest trends and use of the builder's mortgage company --  
are totally unrelated.

Do all the shopping for a mortgage company that you would do without the
builder's "incentive."  Find out the terms of the mortgages offered by that
company, then go to your current bank and/or credit union, and a couple other
places.  Compare rates, terms, and servicing.

If the Fed reduces the Federal Funds Rate, other interest rates will likely
follow.  However, mortgage rates especially fixed rates -- don't necessarily
directly follow short-term money rates.  However, rate trends will be
consistent in your local market, and the comparisons you make while shopping
will be valid even if the rates change in the next month or 2.

 On Sep 18, 11:44 am, "John Weiss"
<jrweiss98155nospamatnospamcomcastdotnospamnet> wrote:

Thanks for the information. I will work on the comparisions.

 wrote:

IMO never use the builder's lender.  The practice is rife with
conflict of interest and there are investigations going on now into
the builders' lending practices.  Beazer is under federal
investigation now.  KB Home was fined over $3 million a few years
ago.  These are just a couple of examples.  There have been numerous
violations of lending laws, as well as predatory and fraudulent
lending practices.  The number of homes in default where the builder's
lender was used is much higher because of these problems.

Also, because shoddy construction is often another serious problem
with new construction, the customer can be in deep financial and legal
trouble if they don't take a lot of precautions.  I would not buy new
without a really good home inspector for example, and preferably
inspect during construction when so many serious mistakes are covered
up.  Forget about warranties, they are "illusory" coverage.  Also
forget about the idea of having the power to sue if things go wrong as
almost all builders and warranty co's now have an arbitration clause
that takes away your right to sue.

Don't count on code enforcement, law enforcement, consumer protection,
or any of that.  If you take a typical builder contract as well as
their lending contract to a GOOD attorney he or she will point out
many flaws that leave you unprotected.

Check out http://www.hadd.com  and http://www.hobb.org    Get on google
and really research these builders and their lending affiliates.  Good
luck!

 On Sep 19, 5:38 pm, fripplet...@hotmail.com wrote:

Nice!!! I am in the process myself and have been doing a fair amount
of calculations. I would suggest going to Bankrate.com  and get the
quotes. Then call up each one of the mortgage companies there and get
realistic quotes. Finally, you will get 2-3 you will like. Tell the
other lenders about the best offers you are getting and they generally
try to outdo each other.

In my case, one gave me interest rate of 6.25 + $2400 closing costs
and another 6.00 + 2700 in closing costs. So I spoke to the former and
told them of the alternative deal and finally got 6.00 + $2400.

This was all last week, that is around sept 12th. So you should try
similar strategies. I think 6% now is pretty good enough. You can
never time it perfect.

Finally, I made a spreadsheet to get perfect comparisons of closing
costs versus interest rate. In my opinion interest rate always wins
unless you sell the house within 1-2 years. So make a table to check
where you are paying more. You should see that how much more you are
paying each year cause of the interest rate. The reason I say this is
that the lenders keep playing with these two values to make one deal
look better than the other.

One of the things you can do is ask for cash back from seller. In this
case, the cash is not given to you but put towards closing costs. The
advantage of this is that the cash back or closing costs get added to
the mortgage and hence spread over 30 years, with a not that bad
interest rate.

Hope this helps