Hi home owners, I am stuck in choosing builder’s preferred lender vs a bank.. here are the evaluation points: Builder’s lender: 1. Offering 3% with 3k credit 2. In house lender so I am not worried about the appraisal 3. Works closely with the builder on the delivery timeline Bank: 1. Offering 2.875% with 1k credit 2. I am worried that appraisal might come low (can’t say for sure) 3. Worried about fees in case the bank delays or the builder delays As per the contract, I cannot change lenders within 30 days of closing. So, I need to let the builder know in 1-2 days whom am I moving forward with. In your experience, have you seen any issues with new construction condos being short on appraisal or banks not complying with the delivery timelines? Estimated closing: April 1st week. The condo is in Fremont, Bay Area. Which one should I move forward with? Any other factor I should consider for evaluating? #mortgage #housing
I don’t know your numbers but your payment will be approx $50/month cheaper with the bank but since you’re getting 2k more credit with the builder, it’ll take you 40 months to break even if you went with the bank. I’d recommend going with the builder’s lender and refinancing later as you can use these credits towards your closing costs and won’t have appraisal issues. However, since the interest rates are creeping up, don’t expect to get a lower rate with refinancing & that you also might incur closing costs again.
Monthly payment with the bank is $135 pm less but I’m losing about $11.5k by choosing the bank. Breaking even with the bank will take about 36 months. I think I’d need at least ~15 years to pay off the loan so choosing bank will save about 12years*12*135 Also I think I won’t get these rates on refinancing later and adding closing costs will further reduce profitability.
Wait, how are you losing $13k by choosing the bank?
Fee free to DM me and we can discuss.
Go with the preferred lender. Then refinance later.