Lennar offering 4.875% fixed rate 30-year mortgage

NEW -> Contingent Buyer Assistance Program
I wonder if anyone will qualify?





I wonder how big of a discount Lennar will be forced to take to sell this loan in the secondary market?
 
<p>A more direct link. . .</p>

<p><a href="http://www.lennar.com/promotions/cement.aspx?pid=12204&cityid=ORA&SourceID=MKT">www.lennar.com/promotions/cement.aspx</a></p>

<p>Wow...Lennar is not even requiring PMI for a 10 percent down.</p>

<p>"30-year fixed rate principal and interest payment amount of $2,143.03*and APR shown based on a sales price of $450,000 with 10% down and Private Mortgage Insurance is not required"</p>
 
IR



They pay up front with discount points from prevailing at lock in or they bought a future committment which is where Lenar pays upfront discount points wheather they use the funds or not.



Of course more people will qualify at 4.875 than 5.5 or 6%



It used to be about 6 points per 1 point of buydown. Keep in mind that is a percent of loan amount not sales price. Builders sometimes have to purchase a committment for a portion of sales to get construction financing as a hedge against rising rates. I would think this is to help more people qualify as the buyer is quailfied on the bought down rate on a full 30 year BD. It is better than granite, options, or closing costs as it allows a wider range of people to qualify for your product against builders who aren't doing a BD.





Regards
 
They are doing this in Florida also. Saw an ad last week where a smallish condo (1350 square feet maybe?) was being sold with this low rate. In low wage Florida, an actual first time buyer could actually afford this. I wonder how much money they are losing.
 
Lee Homes is doing the same deal for their harbor lofts project in anaheim as a grand opening special, whatever that means. plus 2 years hoa
 
<p>LM</p>

<p>You know that buying down the rate allows more people to qualify than lowering the price. Not "trickery" but more like opening the product to a wider range of potential buyers. </p>

<p> Its a numbers game and the seller gains more qualified potential buyers with the same net cost af sales.</p>

<p>Regards</p>
 
Price matters more than interest rate. The buyer would be better off with a lower priced home, and paying less points themselves. Smaller purchase price + same dollar amount of downpayment = lower LTV. A lower LTV may allow for a better rate by itself.



The benefit of paying points decreases with every additional buy-down. Say your 30 year fixed is 6.0% with no points. It will cost you 3/4th of a point to reduce the rate to 5.75%. That's 3/4 a point in fees for a 1/4 point rate reduction. Now to reduce the rate from 5.75% to 5.5% will cost more than an additional 3/4th of a point in fees. A 2.75% point buy-down would only get you down to about 5.25% on a 30 year fixed rate.



In addition, you can immediately deduct points paid from your income taxes if you pay them out of pocket, not if they are rolled into the loan.
 
<p>"Plus, you are paying property taxes on the additional amount for as long as you own the house."</p>

<p>Nah, IR, you can just get your re-assessed at a lower value once the place declines another 20% in price. You don't necessarily have to pay more prop taxes than the guy who waited and bought the same house for cheaper later...</p>

<p><a href="http://www.oc.ca.gov/assessor/pdf/Prop_8_Value_Decline.pdf">http://www.oc.ca.gov/assessor/pdf/Prop_8_Value_Decline.pdf</a></p>

<p>Then again, once the home price recovers, you would be slammed with a big prop tax increase and the bottom guy will still have his 2% limit...</p>
 
Oh I'm sure OC and LA will get right on your request for a reassessment of lower value. this will be top priority for counties that are getting more and more cash strapped. I bet they will make you jump through hoops and tread through hell and high water.
 
Is it difficult to get a home "reassessed" at a lower value? If it is, maybe the county should be involved to begin with - when giving a property valuation for the purpose of securing a mortgage...
 
<p>The small cheap Florida condo in the space coast was only $139,000. I consider that a reasonable price. P & I with I think 20% down, was about $660. Taxes, and assn fees, which includes building insurance would take it up maybe anyother $400.</p>

<p>Quite close to being affordable.</p>

<p>In Florida, you pay 15 bucks, and get a hearing scheduled on the value and take an appraiser or realtor (!) with you or some comps, and they often do reduce the taxes.</p>

<p>I'm advising ALL my clients to file for reduction next Sept. They only give you a 2-3 week period to file in hopes nobody will.</p>

<p>The local govt entites are going to be dying a year from now.</p>
 
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