Mortgage Negotation

[Anonymous]

This is my first post ever but I've been on this site for over a year cleaning up my credit and I was just pre-qualified for a new home.  My scores started off in the low 500's and are now in the high 600's Thanks to everyone on this board. 

My delimma is the builder I'm purchasing my home from has bought down the interest rate for anyone purchasing their current inventory homes, they've been running this sale for 2 weeks now with ZERO sales.  They currently have about 10 standing inventory homes.  The prices are still pretty high for the comparable homes that are being sold as resales.  So far I am the ONLY one who has put down a deposit and the sales agent said I can only get this deal and not the other 2 deals which are:

• Make and offer
• $10K towards closing costs

Do you think it's unresonable to want the buydown amount and still ask for closing costs even though he said I can only get this one deal?  Buydown is at 4.7% 30yr Fixed and with no sales or reserves but mine I think I have a pretty good case.  I want to get the best deal I can and if these homes are still sitting there with over 2 weeks of this promotion I'm thinking people are feeling the prices are still too high and resales are a better deal.  It's pretty bad out here in Las Vegas with foreclosures and short sales.

Please give me your thoughts before I sign...  Thanks

[Anonymous]

It can not hurt to ask, but there is no way to know what their bottom line is on the houses.  In some cases, if the builder is not cash short, they would rather sit on houses than drop them too much and take a loss on them.  They may be waiting to see if the tax credit is extended/etc before offering too many more deals that way if it gets extended again and/or increased, they may be in a stronger position.  Also, generally a re-sale is not ever going to come the same as a new build  When we bought there was well over 100K higher price for the new model (in so cal) verss the resales that were only a year old, even with the new build prices being slashed.

[ShanetheMortgageMan]

The rate buy down and the closing cost credit might just come out to the same thing - that is what a rate buy down is, you pay points (1 point = 1% of the financed loan amount) to get a lower interest rate.  So if you are buying a home with a loan amount of $250k, and they said they will pay 4 points to buy down your rate, that is the same thing as if they paid $10k towards your closing costs and you asked the loan officer to buy down your rate with it.  Now if you choose to do the rate buy down, you are basically locking yourself into only being able to use the builder's credit to buy down the rate, no flexibility if it turns out that the rate buy down isn't going to pay off as soon as you think it is... my opinion, I'd ask for the $10k credit and negotiate on the price of the home.