Remember that an estimate is still just that, an estimate. Some borrowers expect that the cash to close will not vary from what they were told, but the reality is that it can. A last minute surprise of a few thousand dollars can really wreck your plans. A few lenders guarantee their estimate. Some may tell you they can close in 10 days and then 8 days later say it will be next week. Don't be surprised.
Closing costs will vary based, first on the exact date of closing, because daily interest is charged until the end of the month of closing. A lot of lenders use the 15th and don't adjust their prepaid interest number to match the actual anticipated closing. Other lenders will estimate insurance lower than you might be able to locate. So, remove prepaid interest and insurance and compare all three again. Taxes and other costs should not vary on what is left. If MTH is still lower, then it is likely the best deal, provided there are no discrepancies in the documents delivered to the title company. Yes, occasionally some lenders quote one rate and then the documents show a different rate on the note.
If you see different charges among them, like one charges an administration fee, and one charges a high tax certificate fee and so on, those are what you are comparing. You will get your own insurance and it would be the same number in all 3 scenarios. The daily interest, similarly, would be roughly the same for all of them on the same date of closing.
But, having disposed of variances in timing and actual costs, if the MTH GFE looks the best in terms of cash to close and monthly payments, then it probably is. (Remember to back the daily interest unless it is calculated for the same closing date by all 3, and to back out the insurance unless it is the same estimate for all 3.)
Shop around for insurance to get a decent provider. I can suggest one we often find is the lowest.
Some types of loans require specific appraisal rules, like FHA, and VA requires your lender to use a particular appraiser assigned by them. Inspections are your choice. On a new-build you can simply wait until near the end of the builder's warranty on the house, usually a year, and bring an inspector in to catch any defects you have not already uncovered yourself and had the warranty department fix.
It's probably too late to bring a Realtor in to represent you, since you are about to close, but for next time, take advantage of Realtors' expertise -- it doesn't cost you anything and often can reduce your sales price.
Congrats on your new purchase. Meritage is a great builder.
1. There is usually no downside from using the builders lender. They use MTH which is owned by Meritage. You'll be signing a bunch of disclosures at closing to the effect that you are aware of that. They are usually competitive as well as you see from your GFE.
2. You don't have to get another inspection or another appraisal. Only one no matter which lender you choose. The only exception on the appraisal is if one lender has ordered one and now you are switching lenders or if the type of financing is changing such as switching from conventional to FHA or VA etc. then a new appraisal has to be done.
3. The HOA start up fee is a one time fee charged by the builder to form and implement the HOA. The annual HOA fee should be separate. You may need to negotiate this fee with MH.
However, we just closed a home with them in Keller and the clients were very happy with the lender at Meritage.
Don't just look at the rate, but all the cost. Sometimes they will charge you a slight higher rate so they can roll in some of those extra cost. Either way you are normally going to pay it just depends how you are going to do it. Rate VS Closing Cost. It is a pay me now or pay me over the term of the loan.
2. Disadvantage to using builders lender is what happens if their good faith estimate is not what is good at closing and loan will likely be sold at closing. Your financial information is perhaps less secure if anything goes wrong and you need to neogaiate something out of the ordinary. Maybe even too late for that now.
3. ALWAYS do a home inspection, no matter what lender you use. Really two separate issues.
4. They will do the appraisal for you. It's more for them, than for you. Builder appraisals are almost always off. Most buyers in a new neighborhood pay more than the house is worth, but that won't be reflected on the appraisal.
5. HOA startup fee is in the HOA docs. You might want to read them, before you sign.
6. ALWAYS use a realtor when purchasing a new home. They'll answer all these questions for you and many many more. They may even have contacts who can give you better financing. I just saved one client over $5500 on his financing by using my main lender contact and this guy was a real shopper.
1) None, as long as the builder is not offering you incentives to close with them and disguising it as a seller assist
2) None, sorry
3) The Start up fee is for the homeowner association and since its usually collected quarterly, it is probably to get you prorated and current for next quarter
Mortgage Lending Officer
National Bank Of Kansas City
(800)375-8096 ext 0147