topic Re: In-House Mortgage Brokers in Mortgage Loans

In-House Mortgage Brokers

MrChairman — Sun, 11 Nov 2012 21:30:19 GMT

My wife and I are currently buying a house from Ryan Homes in the DC metro area in a new development. We are required by contract to apply for their in-house mortgage lender aka broker, NVR Mortgage. They peddle $7,500 closing cost assistance but of course this is built back into the loan with origination fees and other padded fees. I am just curious as to how this is legal as it seems like all of these companies are co-mingled together. NVR Inc., owns Ryan Homes, NV Homes, NVR Mortgage, and NVR Settlement Services. I also assume they get paid when they sell your loan as well?

Re: In-House Mortgage Brokers

mizmagic — Sun, 11 Nov 2012 22:29:05 GMT

Bump!

I too am looking at Ryan Homes in the DC area. I have a ways to go before I qualify, but am curious about this as well. Good luck!

Re: In-House Mortgage Brokers

MrChairman — Sun, 11 Nov 2012 22:34:09 GMT

I just applied for USAA Mortgage and will hear back sometime next week I assume. NVR estimated property taxes at 350 a month while USAA estimated at 160 a month. I have been saying all along that 350 a month in property taxes is vastly overstated by of course says they have sold houses at this much before.

Re: In-House Mortgage Brokers

K_J — Sun, 11 Nov 2012 22:59:57 GMT

I am also buying a Ryan home in the DC metro, however, I don't think you are required to use NVR unless they are giving you free options/incentives. you could always sort your own financing besides if you get a lower interest rate they are required to match it, if they couldn't you could keep their incentives plus use your own lender. someone correct me if I'm wrong.

Re: In-House Mortgage Brokers

K_J — Sun, 11 Nov 2012 23:12:27 GMT

I also think that $350 per month property tax is correct, at least in Charles co. I think it is more in PG/MO etc. My wife is a realtor and I see the figures all the time.

Re: In-House Mortgage Brokers

StartingOver10 — Sun, 11 Nov 2012 23:18:50 GMT

K_J wrote:
I am also buying a Ryan home in the DC metro, however, I don't think you are required to use NVR unless they are giving you free options/incentives. you could always sort your own financing besides if you get a lower interest rate they are required to match it, if they couldn't you could keep their incentives plus use your own lender. someone correct me if I'm wrong.

^^^yes, this is right. The OP is correct in his anaysis too. The seller can not force you to close with their inhouse lender, but you do have to make application with them and get approved by them in order to use your own financing. Most of the builders use this method because not only do they build in "fat" closing costs but they bump the rate a litte too. If you make application with an outside lender you almost always get a better deal even when taking the builder incentives into account.

Re: In-House Mortgage Brokers

MrChairman — Mon, 12 Nov 2012 01:36:12 GMT

NVR told us that if we get an outside lender and NVR can't match it, we get to keep the 7500 in closing cost. But in our contract it states that you MUST use NVR to get the incentive. Both the sales rep for the community and the loan officer both told us that if they can't match it we will still get the 7500 so we'll see. I hope they stand by their word because they really don't want a holy war with me :-). Starting, they quoted us at 3.75 for interest rate and 4.01 for APR. The going rate in our area is 3.35 with 3.55 APR. This is on top of all of their bs fees.

Re: In-House Mortgage Brokers

beb86 — Mon, 12 Nov 2012 05:28:54 GMT

Yeah they cant make you use a certain lender and I would call BS on anything the will give you in exchange for using there in house lender...if you still have trouble with them walk away

Re: In-House Mortgage Brokers

StartingOver10 — Mon, 12 Nov 2012 14:10:37 GMT

MrChairman wrote:
NVR told us that if we get an outside lender and NVR can't match it, we get to keep the 7500 in closing cost. But in our contract it states that you MUST use NVR to get the incentive. Both the sales rep for the community and the loan officer both told us that if they can't match it we will still get the 7500 so we'll see. I hope they stand by their word because they really don't want a holy war with me :-). Starting, they quoted us at 3.75 for interest rate and 4.01 for APR. The going rate in our area is 3.35 with 3.55 APR. This is on top of all of their bs fees.

Yep, this is typical for builders - all the large builders I've worked with do the same thing. They actually get the incentive funds, $7500 in your example, from the extra high rate you pay. Their marketing counts on you not shopping around so you aren't aware of the difference.

IMO its better to take the lower rate and less closing costs with an outside lender, but some people don't mind taking the higher rate and paying higher costs to "get" the incentive.

Be careful with anything they say verbally. If it's not written in the contract, you won't get it. Since both the sales rep and the mortgage rep claim you will get it anyway, have them send it to you in writing. That may help when it comes to actually closing. The best way to make sure it happens is to have an addendum in the contract that specifies that you will get the incentive if you use an outside lender. Ask them. I bet they give you all kinds of excuses as to why they can't supply it in writing.

Re: In-House Mortgage Brokers

K_J — Thu, 15 Nov 2012 20:00:39 GMT

Yes, make sure you have anything promised in writing no matter how small, I have been locking for over one year on Ryan homes blogs and know the problem people encounter. Overall, if you play you card well you should be fine.