Buying New Construction in Hemet, CA: Tip #6 - CAUTION: Builders Financing

In today's "Buyers Market" there are many great bargains available in both the resale market as well as the new construction. Make sure you weigh all of your options. In Hemet, CA we do have many great opportunities to buy a home for sale either from the builder, the bank (as in foreclosure homes) and directly from the homeowner - either as a short sale or a straight retail transaction (although the later are becoming less and less available as it becomes more difficult to compete with the builders and the banks).

This series of articles is provided to help the first time homebuyer or even the move up homebuyer make the right decision when buying new construction in the Hemet - San Jacinto Valley in South West Riverside County area of the Inland Empire in Southern California.

6. Watch Out For "Special Financing" - Most homebuilders have financing available. Sometimes it is through a division of their company and other times it is a special arrangement with a ‘partner' mortgage lender.

In order to generate an additional ‘profit center', the builders will market some sort of special incentive to entice you to apply for your home loan through their in-house source. Be careful though, as the bottom line is still the bottom line, no matter how good the incentives look on the surface.

Certainly it is OK to start the process with them; however I strongly urge you to find your own financial service - be it your personal bank, the local credit union or a mortgage broker that will be straight with you..

This is such an important aspect of the home buying process and perhaps the one that is overlooked the most. Those ‘special incentives' may cost you thousands of dollars, just in the first few years of the loan and may jack your payments by hundreds of dollars every month.

Not blaming the mortgage industry, but they have a very complex way of packaging and selling loans. You need a loan officer who will explain all of the costs to you. The most important document you can have in the beginning of the process is the "Good Faith Estimate" and then the "Estimated HUD-1" as the process unfolds. These documents will reveal to you exactly what you should be paying. When the loan is scheduled to close, there will be the actual "HUD-1". Before you sign anything else, look this document over and see what is different from the "Estimated HUD-1".

You need to know that the Hemet home builder CAN NOT require you to use their financing in order to buy their home. Go ahead and negotiate your purchase of a new home as if you will use their program, but please do your due diligence (something else your Buyers Agent can help you with.

Please read and consider these tips on what you need to consider if you are going to shop and buy a NEW construction home in the Hemet - San Jacinto Valley...or anywhere else in South West Riverside County - the Inland Empire - Southern California or anywhere else for that matter.

Until Next Time, Have a Blessed Day,

John Occhi, Hemet CA REALTOR®
Mission Grove Realty

Author of "What You Need to Know...About Foreclosure and How You Can Stop It!" - If you are a Hemet or San Jacinto Homeowner please call (951-443-6259) for your free copy.

This blog and the contents written here is the intellectual property of John Occhi, Hemet California REALTOR®. The views and opinions expressed are just that - views and opinions of John Occhi and those who comment. Please note that I am not an attorney or a tax professional and any time I discuss either topic, I suggest you consult with the proper professional for relevant assistance.

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