NVR up to their games AGAIN!

[MrChairman]

So things finally came to a head with NVR last week. They told us flat out "NO" that we couldn't add the $2300 in options to our purchase price. Note these changes were done in November 2012. My home isn't scheduled to be completed until June 2013. NVR decided to start the underwriting process as soon as we did the application, even though we still had much more time to make changes to options and such. They also told us that we couldn't pay this amount in cash either because it would change the taxes and the mortgage amount or something. I have told this to several loan officers and they all looked at me with a confused look and a couple flat out told me NVR was lying to me. So I told NVR that I will be finding another lending institution. They were not happy about this at all. I get a call from our sales rep saying that NVR would not be able to extend the $7500 in closing cost assistance if we don't go with NVR Mortgage. I have e-mails and verbale assurance that if we find a better deal we would get the assistance. I told the sales rep that I would contact NVR's Vice President in my area to find out what exactly is the truth. She quickly retreated and told me that she would "fight" for us to keep the closing cost assistance. So we'll see what happens. Even if NVR comes back and gives us the $2300 off the purchase price or decides to let it be included in the final loan amount, I WILL NOT be doing any business with NVR Mortgage.

[foofighter74]

I wouldn't do business with them either. You can easily get a better loan elsewhere it seems like, and as far as the closing cost assistance, Ryan Homes is still the seller and they shouldn't really have an issue with helping out with closing costs to make a sale no matter who is funding you. 

[MrChairman]

It seems like there is ALOT of commingling as far as companies are concerned. I see no seperation of NVR/Ryan Homes/NVR Mortgage, ect. Why is my sales rep involved in the mortgage aspect of things? Her job is to get people to sign the contract, after that her job is done. I am seriously thinking about contacting my state AG's office because this is clearly illegal.

[foofighter74]

In my case, my sales rep wouldn't even call the NVR mortgage representative. She did send the contract to them so that when we went in to apply they had all that information, but prior to that, we wanted to consult with NVR about a couple items on my wife's credit report.  In setting up that meeting, the sales rep simply gave us his number and email address.  And when we decided to go with another lender, our SR didn't even know about it. 

I don't know if your rep being involved in the mortgage stuff is illegal or not, but they are clearly hoping she will get you to back down and just take the deal without the additional upgrades.  We have not been all that happy with dealing with NVR here, but the Ryan Homes sales rep has been really good with us even though she made some mistakes with our contract.  Those mistakes were quickly fixed, and in one case, she gave us the upgrade we wanted free because she forgot to add it to the contract. (We needed the loft in our floorplan converted to a 4th bedroom. This isn't normally an expensive upgrade, but because an addendum was needed to the original contract, they gave it to us for free). 

As for why you couldn't pay in cash for the upgrades...my first question is what are the upgrades? Are they structural? Or are we talking about some sort of countertop or ceiling fan or something like that? Because frankly, you could probably make a better deal with the people Ryan Homes use for that work on your own.  Have them come in and do it after closing, pay cash, everyone wins...and your taxes don't increase because of the upgrades! 

[MrChairman]

Foo,

One of the upgrades was for carpet and upgrades to tiling in the bathrooms. Stuff we would perfer to have done before we move in. The other was an alarm system which I also wanted installed before we move in as I don't want wires and holes drilled in the walls. And I knew she was lying about the taxes thing but I just said OK and went down the street to another lender. They kept insisting that these upgrades are "minor" and we could always get the stuff installed after. I don't know about them but I don't have the cash laying around to pull up brand new carpet and get the one I want installed. Same goes for the different type of tile we have in our bathroom.

[foofighter74]

Understandable.  The total dollar amount is so small...you'd think they would just drop the price of the house by $2500 and be done with it.  I mean, they're building this place as we speak...you'd think they would want to do all they can to make sure it will not become inventory when it's done.

I think you should get an approval elsewhere and see what impact that has on NVR. 

[MrChairman]

I am working with a bank now. I already have a preapproval letter with the additional price. They don't do conditional approvals until the house is finished as there is nothing to inspect. When I brought the letter in the NVR rep started asking a bunch of questions. I simply told her to contact my new loan officer and left. She seemed a little annoyed.

[Autumnslight]

What a load of crap. I'm so nervous about dealing with NVR because of stories like this.

In all fairness though, the tax thing is true as far as I know. It might depend on the area, but where I'm building, the town assesses the property taxes based on the total sales price of the house. So if you add, say, $5k of options, even if you pay for them in cash, that still adds to the total sales price of the house and increases your taxes, which increases your monthly payment and your tax escrow due at closing. That in and of itself doesn't change the actual amount of the loan though.

What could change the amount of the loan would be the upfront MIP (assuming you go FHA, or pay conventional PMI upfront). You're adding $5k to the price and adding $5k to your downpayment, which nets to zero. But it depends on whether your total down payment now is 3.5% of the old sales price plus $5k, or 3.5% of the new sales price, plus $5k. In the first scenario, the total loan amount actually goes down by a tiny amount. In the second scenario, the total loan amount stays the same. So, that part shouldn't be an issue at all.

I'm guessing NVR's issue is the increased monthly payment, not that the actual loan amount is changing. If it's that the actual loan amount changes, then that doesn't make any sense to me. Regardless, if you've got a better deal elsewhere, that's awesome, and too bad for them!

[foofighter74]

Autumn, if you google "building a Ryan Home", you'll find a ton of blogs maintained by people who have gone through the entire process of building a home and financing through NVR and several of them have had issues with the mortgage process, but you'll also find quite a few that had no issues with NVR and sailed right through.  You might have a perfectly smooth experience.   Wouldn't surprise me.

[MrChairman]

Autumn,

I sent you a PM!