Lender can't close loan what about incentives??

[melody301]

What is the name of your state? MD

Long story short: We've been in the process of buying a newly contructed home since last May. Our lender informed us Monday that because my husband switched from w-2 to 1099 late last year (October) they can't close the loan but found another company who could and would offer a better rate. The second company is requesting tax transcripts from the IRS for my husband's 2006 tax return. If we sign the form allowing them to get the transcripts from the IRS we know they will not be able to close the loan either because he itemized to many deductions which made his taxable gross income very low.

We are scheduled to go to settlement tomorrow and have decided to use a lender we know and she stated to us last night that she won't have a problem with closing the deal. We have not yet told lender number 2 of this. We were offered a $20,000 credit if we used the builder's lender. But since they couldn't close the deal and they passed us on to another lender that we know won't be able to close the deal should we still be able to get our incentive credit since we had to find our own lender?

 

[moburkes]

What is the name of your state? MD

Long story short: Our lender informed us Monday that because my husband switched from w-2 to 1099 late last year they can't close the loan but found another company who could and would offer a better rate. The second company is requesting tax transcripts from the IRS for my husband's 2006 tax return. If we sign the form allowing them to get the transcripts from the IRS we know they will not be able to close the loan either because he itemized to many deductions which made his taxable gross income very low.

We are scheduled to go to settlement tomorrow and have decided to use a lender we know and she stated to us last night that she won't have a problem with closing the deal. We have not yet told lender number 2 of this. We were offered a $20,000 credit if we used the builder's lender. But since they couldn't close the deal and they passed us on to another lender that we know won't be able to close the deal should we still be able to get our incentive credit since we had to find our own lender?

No. Since you were not able to get the credit, you do not qualify for the incentives.

 

[melody301]

No. Since you were not able to get the credit, you do not qualify for the incentives.

Maybe I didn't state my question clearly. What I meant was since they can't finalize our loan and they passed us on to another lender they were still going to give us the $20,000 closing help and design center credit. But now that the second lender can't close the deal either we are pretty much forced to find our own lender so shouldn't we still get the $20,000 credit? It's not like we chose not to use the builder's lender they can't finalize our loan we should still be entitled.

On other thing is the entire neighborhood of homes is all brick front about 133 homes. When we sat down to decide on our design the builder threw in the brick front as an incentive at no charge. I'm guessing because they want to keep all the homes uniformed and they don't want people chosing siding instead because they can't afford the brick front. They also threw in 2 additional windows in the masterbed room stating it was some type of county regulation. Now that I look at my contract it states that these options are contingent upon us using their lender. I'm affraid that they are going to charge us for the brick front and the windows (which were county regulations why they were added). It wasn't like I had a choice not to get the brick front or the windows. Can they force us to pay?

 

[moburkes]

They can't finalize your loan because you don't qualify, not because they don't want to.

 

[Buk1000]

Using the builder's lender has its own set of problems. Incentives may be rolled into the loan in some way, the interest rate may be higher, or there could be other terms that have you trapped. It sounds like you're trying to buy more house than you can really afford which is also problematic. I know you don't want to hear it--who does?--but if you're cutting things this close you're risking financial disaster if even an ordinary calamity were to befall your family. I read a couple of articles on foreclosure recently that indicated using the builder's lender had a much higher rate of default and it described why. IMO builders should not be in the lending biz. I see too many problems with it, and since loans are sold, the builder is not on the hook for the eventual fallout because so very few instances are ever investigated for wrong doing. Most of the problematic issues in lending are not technically even illegal but can result in financial harm to the consumer nonetheless.