New construction after short sale

[cpm]

I am under contract to purchase a Pulte home in S. Florida. I had a short sale that was completed September 28, 2012. This new home is scheduled to close on September 29th. Pulte is offering 3500 incentive to use their lender and I have the initial approval through DU. My question is should I also look at other lenders at this point or wait until closer to the closing date in September? Thanks for the advise. 

[ShanetheMortgageMan]

Are you doing Fannie Mae (conventional) financing or FHA financing?  How much are you putting down?

[cpm]

Hi Shane,

conv with 20% down

[ShanetheMortgageMan]

Technically the application has to be after the 2 year mark of the short sale.  Make sure the underwriter does a full review before getting too far into the process, otherwise plan on starting on Sept. 29th instead of closing that day.

[cpm]

Thanks Shane. I was given conditional approval by the underwriter with 15 conditions. I am told by the processor that they will pull my credit again on September 29th but can close soon after that as long as all the paperwork is in order. At this time I am submitting all requested paperwork and they will get me "approval" by the end of March. I'm guessing Pulte wants this before starting construction. 

[ShanetheMortgageMan]

It sounds like they are just going to start the application part over on the 29th in order to meet Fannie Mae guidelines.

[ezdriver]

I've had buyer clients be issued a commitment but the closing was postponed until after the clock runs out so to speak. We don't do that with build-to-order homes but only on completed inventory homes. I think that some builders use transactions such as the OP's to do what our trade calls "hidden specs". This happens when senior management would not approved true spec construction but local sales folks want to have a couple of inventory homes. The purchase transaction is used to justify the onstruction of the home and it simply becomes an inventory home if the buyer cannot close on it for any reason. Think about the timeline from purchase to closing. That is a long time for a builder to bet on the buyer's credit still being good after many months of construction.

[ShanetheMortgageMan]

I agree, I've had many builders ask for a pre-approval letter so they can get a loan from their own bank to build a home.