Home Buying in Jacksonville>Question Details

Dksmith2118, Home Buyer in Jacksonville, FL

What are prepaids?

Asked by Dksmith2118, Jacksonville, FL Thu Jan 31, 2013

the builder that we are interested in says that they will pay all closing cost and prepaids if we select their preferred lender. Prime Lending. I never heard of this company before but we really need our closing cost paid.

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Hi .....again......there are several parts of"closing costs".........the costs you will have at the time of closing of your home includes the !. Down Payment (your binder is part of this amount)
2. The closing costs which can include a survey, simultaneous title insurance, and any other closing costs that you have agreed to pay in the contract you have (or will) sign...some of these items are required by your builder(seller) 3. PRE PAIDS pre paids include the first year of homeowners insurance, a few months of the homeowners' insurance premium (so the full amount wil be in your escrow ( the escrow in this area means the amount the lender collects each month for insurance and taxes...AND homeowners' association fees, etc....like CDD fees and property taxes...and possibly stormwater fee and garbage collection fee) and as just mentioned....the a few months of the property tax (based on one twelth of the yearly taxes), and the other fees just mentioned ....including homeowners' association fee, CDD fee, stormwater fee, and garbage fee.

We have used Prime Lending....there is no reason (that we know) that would cause us to be concerned about their integrity or business dealings. They appear to be a fine, reputable company.

It is NOT unusual for a builder to offer incentives like you mentioned for buyers to use their preferred lender....the builder has a relationship with a preferred lender....possibly suppying finance for the builder as well.....AND ....they trust that their preferred lender will do everything to assist their buyers in a prompt and professional manner. This is business "as usual".

You would be WISE to accept this assistance from your builder!

If you....or anyone you know....has a question...or needs guidance or assistance in real estate...keep me, Donna, and my son, Hickory in mind.....we are experienced, full time, active real estate agents who CARE.

Donna Delegal
"The Real Estate Lady"
startpacking@comcast.net
(904) 732-7225
Hickory h.delegal@comcast.net
(904) 463-5664

START PACKING!
0 votes Thank Flag Link Sat Feb 2, 2013
Hi,

Sharon gave a really great explanation. Having your costs paid by the builder is a wonderful incentive. I too have had buyers who used Pime Lending. As stated their consultants are courteous, prompt and sensitive to your home buying needs.

Wishing you much success in your new home purchase. Should you have any questions that your agent is unable to answer, give me a shout.

Charlie
Charlie Chorman - REALTOR
Accredited Buyer Representative - ABR
Coldwell Banker Vanguard Realty
904-571-1358
0 votes Thank Flag Link Fri Feb 1, 2013
Hi Dksmith,

Prepaids are - one year homeowner's insurance, and your tax and insurance escrow which is three months that will be put in your escrow account at the bank towards next year's property taxes and homeowner's insurance.

Prime Lending is a mortgage broker and they have some great people. I have dealt with them before and they always do a great job.

It is almost always worth it to go with the builder's lender so they pay the closing costs. They are very competitive and will usually match the interest rate that you find elsewhere, in case they are coming in higher.

I do hope that you have a real estate agent representing you in your purchase, because the people working on site are employed by the builder. As nice as they can be, they have limitations that your own Realtor® will not have.

I also recommend that you have your own third-party inspection. It is always a good idea to have an independent third-party go over the house.

Hope this was helpful - let us know if you need anything else.

Best regards,

Sharon H. Alters, GRI
Team Alters
Coldwell Banker Vanguard
904-673-2308
sharon@teamalters.com
Web Reference: http://teamalters.com
0 votes Thank Flag Link Thu Jan 31, 2013
Thank you this really helps alot..
Flag Thu Jan 31, 2013
By "pre-paids," they mean: your first year of homeowner's insurance premium and lender-required reserves for property taxes and the following year's insurance. They call them "pre-paids" because when the property taxes and insurance premium come due, they take the money to pay them from a reserve account that you have been contributing to.
0 votes Thank Flag Link Thu Jan 31, 2013
Thanks
Flag Thu Jan 31, 2013
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