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Tucson10 (68.87)

Pulte Mortgage Headache

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July 17, 2007 – Comments (8)

Well, the excitement of buying a Pulte Home has worn off.

In order to get the incentives offered, we had to sign on to use their Preferred Buyer Discount Program.  That is just a fancy title for you have to use our Title company and Lender to get the money we dangled out there for you so we can make it back in the profits we make on your loan and title insurance.

Okay, so we get the 10% off the sales price.  We do our upgrade choices and those add up to $10k.  We are thinking we will use the $10k offered for upgrades to keep the sales price the same.  Oh, how naive we were.  We got the (Good Faith Estimate)GFE from Pulte Mortgage and I was shocked.  Their interest rate was .5 higher than I expected.  I went to my bank, USAA (which I LOVE), and got a GFE from them.  They were .625 lower.  Also the closing costs were very different.  Pulte was $3,330 more (origination and pre-paids not included) than USAA.  The origination fees were $1300 difference. The mortgage insurance for Pulte is $190/month, USAA only $88.  We have an average FICO score of 797.  I thought Pulte would be more competitive.  I tried to negotiate with them.  Come on it costs $150 for document stamp and $50 for electronic documents, ridiculous.  They would not discount a single fee or lower interest rate or origination fees.  NO negotiating.  What they offer is it.  So in order to not have it cost me a fortune at closing, we have to use the $10k to cover closing costs and buy down the interest rate.  If I go to USAA with their 6.75% interest and $4700 in total closing costs, I loose the $10k. It's such a scam.

Of course, Pulte Mortgage says, "We are being very competitive, look with our mortgage you pay nothing out of pocket at closing."  However, they fail to recognize that if they were competitive with their costs and rates, I should have walked away with out paying closing costs AND gotten $5k applied towards the sales price of the home.

To be honest, I thought I was going to pay $126/sq. ft. for my home, now I am going to have to pay $131/sq. ft.  With the market still correcting itself, I'm not as confident that I got a good deal.  I feel deceived and frustrated by the lack of negotiation.  With an average FICO of 797, their rates and costs should be negotiable.  Am I wrong?

I have learned a lesson though.  We should have asked for a GFE before signing up to buy the home.  Heck, you do that before you buy a resale home.  You never sign up and agree to use a mortgage company BEFORE you see what they have to offer.  Dumb, Dumb, Dumb.

Then I go on the Internet and see all the issues that new homes have had with these builders and really doubt our decision.  At least we had a professional home inspector come in and look at the place pre-dry wall. He only found minor issues like missing strike plates, nail holes through moisture barrier stuff, nothing major. However, after reading many of the stories on line, I may hire a structural engineer next?  If we pull out now, it will cost us $4,000.  Great websites to research home builders are: www.hadd.org and www.hobb.org

So, what do we do?  Buy our new Pulte home for a higher price than we expected.  We still have to put in ceiling fans, window coverings and landscape the back yard. I could get a nice resale home for the same per sq. ft. price and it would have all those things already. Granted I may not have the color choices I would want for the granite counter top, tile and carpet, but I would be no further behind than buying the Pulte home.  Ahh, but the $4k.

Also, haven't sold the Subaru Outback yet.  Things are really up in the air right now financially and it is causing me stress.  Who needs it?

Still have my job though, so that's something positive to end on.     

     

8 Comments – Post Your Own

#1) On July 17, 2007 at 3:14 PM, iamamartin (97.92) wrote:

There is a 3 day out clause :) If you really think they stink, recind the deal and go back to your bank.

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#2) On July 17, 2007 at 7:27 PM, LBStarling (29.73) wrote:

I hope your new home brings you as much good fortune as my Tucson home brought me.  I bought a pre-existing home on the east side of Tucson in June 2001 for $187,000.00 and sold it Nov 2005 for $350,000.00.  Part of that money is what I used to start investing in stocks and the investment is still paying off.

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#3) On July 17, 2007 at 9:47 PM, leohaas (31.55) wrote:

As insurance for your downpayment on the house, I suggest buying some Jan08 $15 put options just in case they go belly up. These options go for $0.35 per share. $700 buys you $30,000 of "insurance" this way. The assumption here is that you are expected to close by the end of this year.

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#4) On July 18, 2007 at 5:13 PM, spartanhoops (38.91) wrote:

i used to work for pulte homes... they force you into their mortgage company because they want control over the closing process... they play a lot of shell games with your rates, closing costs, etc... in the end you don't get a better deal from a mortgage standpoint, but you should get a better deal on the home because of the discount... however, if you said i want the home discount and i'm not going to use your mortgage and my fico score is high... they would give you the discount... they are not stupid they need a sale even in good times... but people do as their told without challenging, just ask the germans during 1939

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#5) On August 16, 2007 at 6:27 PM, Tucson10 (68.87) wrote:

Update.

We are taking the house with the 10% off the sales price and $10k towards closing cost thru their mortgage company.  We had to pay $5500 in Earnest Money so we plan on taking all their deals and at closing we will receive our earnest money back. We will then take our $5500 and refinance with our own bank with a .65% lower interest rate and only $2600 in closing costs.  What a pain in the neck it all was though.  Just keep your fingers crossed that interest rates stay the same or go lower!

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#6) On June 10, 2008 at 5:43 PM, DLEETM (< 20) wrote:

This is a great article!  I'm currently going through the process of buying a pulte townhouse and everything you guys have said is true.  They dangle the incentive in front of you so you have to use their lender which is higher than if I went to another bank.

Moreover, the pulte mortgage people are the most arrogant people I've ever dealt with!  It's been a shell game and I keep thinking I'm getting screwed!  They have an answer for everything and won't negotiate.

If you are planning on buying through Pulte, I would take the advise of the people here and get a good faith estimate before you hand them your deposit. 

 It seriously felt like I was buying a used car!  I don't know how these people sleep at night!!!!!!!

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#7) On June 19, 2009 at 3:25 PM, ECPD (< 20) wrote:

I just bought a new pulte home.  i came across this article and it made me think of what is in store for me. My home is not scheduled to be completed until 12/09 and I have not come close to closing yet, however my offer has been accepted and I have been approved for the loan.  After reading the responses, wouldn't it be a good idea to close with Pulte and get the incentives at closing...then refinance through your preferred lender, with lower rates? As i recall, there is no pre-payment penalty with Pulte. 

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#8) On October 22, 2010 at 2:01 PM, michal9632 (< 20) wrote:

hello friends here is michal and looking for business

  Best Mortgage Deals

 

 

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