great offer from builder??

[buyhouse36]

Builders are suffering now. But they cant reduce price. A local builder has just offered a 20% rebate/incentive on 2 remaining units. ( price 150K) The rebate can be used for closing costs, appliances, moving exp, than the balance to the buyer.  That rebate would pay off ALL our debt. Therefore we would have a mortgage of only $900 (income over 4K monthly- 1099 for half) and DEBT  BE FREE!!! But we would have to qualify for the 150k loan. Our scores have just hit 600 due to early 2008 financial crisis lates added many 'lates' to our credit reports. Our area qualifies for USDA which is 100% but is there anyway I can get a loan??

[Anonymous]

I could be wrong on this, but I was told with FHA you can not get cash back at closing except as a refund of cash you put in (i.e expenses or deposits).  You can not recieve a rebate from the builder.  I think the same is probably true with USDA as alot of those rules are for all government backed loans.  You would need to check this.  Also, I am not sure how covering moving expenses would fit either.  I think all they could pay for is closing costs,  buying down the interest rate of the loan, upgrades,  and expenses such as the home inspection/warranty, etc.  You may be able to arrange for some of your debt to be paid at closing through the escrow account and in that way the seller could pay it?  Not sure on that.

That said, the lates this recent will hurt your chance of gettng a loan.  See about sending GW letters out.

Also, how loing and how steady has the 1099 employement been.  ID it has not been steady employment for the past 24 months, they may not allow it at all.

[buyhouse36]

I spoke with a rep at Amerisave about the rebate. His response was,'that has nothing to do with me'. So I dont know. This builder also offered to pay the mortgage for up to 1 year plus closing costs. When I mentioned that to a loan officer and our bank, she said 'we dont have a program for that'. So noone has said no...but it seems they dont want to know about it either.

As for the 1099, my husband started the business in fall of 2007. While business was booming right away, getting paid was a nightmare and caused lates from Dec 2007 to May 2008. But for years before that, NO LATES!! We either caught up or re-aged all accounts by end of DEc. Initially, my credit score shot to 642 in Jan. Then it tanked again by an utility bill for an apartment I moved out of 6 years ago suddenly appearded on my credit report. The current tenant, a family member, never took the bill out of my name. I didnt know until it appeared on my report.. The bill has now been paid and the account will be switched over on the 20th. Hopefully I wont have a hard time getting all those lates off my report then.

[Anonymous]

Is the 2K in 1099 income after all deductions or are a bunch of expenses deducted from that?

[buyhouse36]

The 1099 2K is after all expenses...

The other 2K is before taxes.

[buyhouse36]

USDA website says "unlimited seller contributions". Does that apply to this??

[DallasLoanGuy]

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@buyhouse36 wrote:

I spoke with a rep at Amerisave about the rebate. His response was,'that has nothing to do with me'. So I dont know. 

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the rep knows now.

this is a fraud deal if ANY outside agreements are not disclosed to the lender.

the amerisave rep is willing to commit fraud. think about that EVERYONE that may want to use amerisave 

[GFer]

That's sounds like a good part of the reason for the housing crisis we're in now???

[buyhouse36]

I read several  news articles regarding the housing crisis. In ALL articles that discussed new home builders, they openly discussed BMWs, vacations, rebates/incentives being offered to clear inventory. Builders cant lower prices because it will affect their construction loans. But it is legal to offer "incentives' to new home buyers.

[Anonymous]

It is legal for them to do so.  If you have the cash to buy the house go for it.  Most lenders will not allow it (particularly government funded).  The government does not want to subsidize the industries giving kick backs to buyers.  I do believe that conventional lenders do have more room to do this stuff.

As I said before, if it is just debt you want paid, sometimes the underwriter will allow it to be paid at closing and they don't usually care where the funds come from (at least in my case) but there would have to be a wrotten agreement from the seller as to what it was doing and it would be paid through escrow.  You would never see the money though.  There is also usually a cap to what percentage the seller can provide.

Again, it is perfectly legal for them to offer those incentives.  That said, that doesn't mean that lenders are required to allow those incentives to either go above the max allowed or to be paid directly to the seller.