KB home lender - should I lock the rate now?

NEW -> Contingent Buyer Assistance Program
B

Behzad

New member
Hi,

I wonder if anyone has used KB home as a lender i.e. KBHS?  Are they competitive? Did you get any incentive? We are going to close in November and they offer me lock the rate for 180 days with the fee of $4500. I will lose this money if I change the lender. Since the rates are really low (2.75% short term lock and 3% if I lock it for 6 months), should I lock the rate now or give it a few months? I really appreciate any comments/feedback.
 
Congrats on the purchase of the KB Home. I would not pay any extra cost to lock your interest rate now and wait until you can lock for free (usually 30-60 prior to closing). There is a high probability that interest rates will be around the same where they are now or even a little lower. You should definitely shop around your rate when you are 45-60 days prior to closing, an outside lender may have a lower rate despite the builder's incentive. Good luck.
 
Definitely do not pay $4500 to pre-lock. Think of it this way, if the rates tick up even 0.5% for your loan how long will it take to recover the $4500?
 
USCTrojanCPA said:
Congrats on the purchase of the KB Home. I would not pay any extra cost to lock your interest rate now and wait until you can lock for free (usually 30-60 prior to closing). There is a high probability that interest rates will be around the same where they are now or even a little lower. You should definitely shop around your rate when you are 45-60 days prior to closing, an outside lender may have a lower rate despite the builder's incentive. Good luck.
Click to expand...

Thanks Martin! I really appreciate the feedback.
 
Cares said:
Definitely do not pay $4500 to pre-lock. Think of it this way, if the rates tick up even 0.5% for your loan how long will it take to recover the $4500?
Click to expand...

True, but please note this $4500 is not the point. This will go towards the closing costs. I will lose it if I decide not to go with the preferred lender. Thanks for your feedback.
 
The only benefit I see to using the builder's lender is if you're putting down less than 20%. Some lenders are not in the game of low down payment mortgages due to the economic climate. I've found the builders' preferred lenders will still accept low down and sometimes also waiving PMI. As everyone has said on here, at 60 days prior to COE, start shopping aggressively.
 
You must log in or register to reply here.
Back
Top