Home Buying in Chicago>Question Details

Davy, Home Buyer in Chicago, IL

I want to purchase a new home, and the builder will not break ground without a commitment letter.

Asked by Davy, Chicago, IL Thu Nov 8, 2012

The lender, Townstone Financial said they cannot give a commitment letter nor did they sound like they even know what it was. I was pre-approved etc, but they say they can't process a loan or any commitment until the home is completed.

Help the community by answering this question:

Answers

9
Davy,

If I understand you correctly, you are pre-approved by the mortgage lender for X dollars; you should be good to go. When you say pre-approved I hope you are saying the lender has run your credit, collected all financial documents from you meaning you would be good to go to close in 30 to 60 days for X dollar amount loan.

On a side note, if you are pre-approved, don not open any new lines of credit (do not purchase a car, etc.) until after you have closed on your new home.

Davy if you are only pre-qualified I can understand why a builder will not accept that.

I work with the VP of Guaranteed Rate and they fund their own loans. Call Tracey Campagna 773-383-1405.

Best of Luck,
2 votes Thank Flag Link Thu Nov 8, 2012
Wieslaw (Wesley) Jura Vice President. NMLS ID 225274. Direct: 773-304-3412. Fax: 773-283-2788. Cell: 312-405-2404. wjura@unitedequity.us
0 votes Thank Flag Link Mon Nov 12, 2012
Davy,

Talk to the builder about the bank that they have a relationship with.

Or cal Sam Sharp, he was the first to respond and a great lender to work with.

All the best,
Ivan Sagel
312.515.7823
Ivan@atproperties.com
0 votes Thank Flag Link Thu Nov 8, 2012
Davy,
Email me at Corey@McCrayRealEstate.com and I will connect you with 3 loan officers one of them should be able to help you.
If you have any other questions don't hesitate to email me.
0 votes Thank Flag Link Thu Nov 8, 2012
So, help me out here. if I'm not doing it right, then explain what it is need to do.

What type of mortgage broker or bank do I need to go through?

The builder owns the lot, will secure the construction loan etc. the builder needs 5% down minimum, signed contracts, and a loan commitment letter.

I need a loan commitment stating that the lender will approve my loan when it comes time for closing in approximately 90 - 120 days. This is not a construction loan or construction to perm loan. there are no draws, and no actual loan until the home is completed.

This can't be so uncommon, people sign contracts and builders need to know the buyer will get the loan. A lot is at stake otherwise - the builder could get stuck with the home and we could loose our down payment.

Anyone have any idea of what to do?
0 votes Thank Flag Link Thu Nov 8, 2012
find a better agent.. your not doing it correctly
0 votes Thank Flag Link Thu Nov 8, 2012
You need to speak with a lender who has experience in dealing with construction loans.
0 votes Thank Flag Link Thu Nov 8, 2012
Its not a construction loan - the builder gets the construction loan in his name...
Flag Thu Nov 8, 2012
Well they need to make sure you can purchase the property. A pre approval on a regular loan wont work for new construction. You will need a different type of loan for a house that is not built yet. I would speak to a lender who has experience with this.
0 votes Thank Flag Link Thu Nov 8, 2012
Hello Davy - I would be happy to help and I can get you a commitment letter - Please contact me at your earliest convenience

Sam Sharp
Senior VP of Mortgage Lending
Guaranteed Rate
773 290 0455
0 votes Thank Flag Link Thu Nov 8, 2012
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2014 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer