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If you are in the market for a home and you a veteran, you may look at a new home instead of a home that has been previously owned. When you look at a new home, most builders will want you to use their lender and they may not offer you a VA home loan. This is legal, however there are some things that you as a homebuyer need to know.
Is the builder offering an incentive to use their lender? This is a common ploy often employed by builders to get you to use the builders lender. They may sell you a home for $200,000 and then offer $10,000 in options. The builder usually pays MUCH less for these options and it may only cost them 25% of the option cost. Are the mortgage terms competitive? Many buyers find that in exchange for using the builders lender that they often pay higher rates and fees. Can you use your texas veteran home loan? Most builders don't want you to use the texas veteran loan because the home must be Energy Star certified. This will help you in the future by lowering your energy costs but it costs the builder more and cuts into their profits. If you are dealing with a builder that is trying to push you into using their lender then you need to know where the builder is coming from. The builder plans to make money from lending you the money to purchase the home but they are also trying to make sure that the sale won't fall through because of a problem with the financing. The builder doesn't want to spend money building a home and marketing the home to find a buyer, only to have the financing fall through. This is understandable from the builders standpoint. However, you need to look at your own situation from a veterans standpoint. Are your terms competitive? Are you getting an incentive? If you are getting an incentive and you terms aren't competive then you can normally get a better deal by going elsewhere. I helped a veteran last month purchase a new home using his Texas Veteran home loan, this veteran decided that he was purchasing the home and that he would use his own financing. He had the guts to stand up and insist that they offer the same deal regardless of who financed his home. Guess what? The builder was more worried about selling the home and paid for his closing costs AND gave him $15,000 in options while getting the best terms on his loan. You can too, if you have any questions, please feel free to email or call
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