Home Buying in Milpitas>Question Details

Adrian, Home Buyer in Santa Clara, CA

I recently went to look at Centria (brand new condos) near Great Mall (milpitas). The sales agent mentioned

Asked by Adrian, Santa Clara, CA Sun Aug 17, 2008

that in order to buy a home at Centria I had to be pre approved and get a loan by their lender (DHI?) who is offering a 30 yr fixed at 5.5% ? Is that possible that a prospective home owner needs to be forced to work with the preffered lender and is that even a plausible rate where all other banks are at 6.5 % ? What gives ? I almost got the impression that they were desperate to sell the last dozen' homes remaining (accd to the agent) ?

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Often builders will offer incentives to use their lenders. There are a variety of reasons this is an advantage to the builder. However, you should shop around. Sometimes you can get them to add language that you use the builder's lender so long as they meet or beat the best deal you can find elsewhere. In no case can they force you to use their lender. That is a violation of RESPA laws, which carries heavy fines.
0 votes Thank Flag Link Sun Aug 17, 2008
Adrian,
It's common for the builder to require you get an approval from their lender ,but they cannot require that you use that lender. However, it is always worth comparing them with whoever you are currently using as in some cases the builder has locked in below current rate finance months or sometimes years ago.
Good luck, Bill
0 votes Thank Flag Link Sun Aug 17, 2008
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