Should I go with IP in house lender OnQ?
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NEW -> Contingent Buyer Assistance Program
There are two aspects to OnQ.
1 - you have to pre-qualify with OnQ (or Wells Fargo for some IP properties) in order to purchase the house. This has to happen regardless of where your loan ultimately originates from. In my experience, the OnQ pre-qualification process is a bit more invasive (I guess they would call it "thorough" :
) than other builder lenders.
2 - you do have the option of using your own lender. The only reason to absolutely go with OnQ is if the builder throws in build/option incentives, which are rare to non-existent in today's market. You are right to shop your mortgage...check rates, APRs, origination points, etc. before you commit to OnQ. They receive kickbacks from the lenders, which gives them a little leverage. However, if you have an experienced broker, you can probably pocket some of that kickback, or get a zero-cost loan.
Also, OnQ will be able to lock in rates for the duration of the build (3-9 months). 3rd party lenders will only allow you to lock in 30-60 days, with additional fees incurred for longer periods, which makes it cost-prohibitive. OnQ may try scare tactics to "encourage" you to stick with them (via doomsday escrow fallout scenarios), but they cannot legally force you to use them.
Good luck.
1 - you have to pre-qualify with OnQ (or Wells Fargo for some IP properties) in order to purchase the house. This has to happen regardless of where your loan ultimately originates from. In my experience, the OnQ pre-qualification process is a bit more invasive (I guess they would call it "thorough" :
) than other builder lenders.2 - you do have the option of using your own lender. The only reason to absolutely go with OnQ is if the builder throws in build/option incentives, which are rare to non-existent in today's market. You are right to shop your mortgage...check rates, APRs, origination points, etc. before you commit to OnQ. They receive kickbacks from the lenders, which gives them a little leverage. However, if you have an experienced broker, you can probably pocket some of that kickback, or get a zero-cost loan.
Also, OnQ will be able to lock in rates for the duration of the build (3-9 months). 3rd party lenders will only allow you to lock in 30-60 days, with additional fees incurred for longer periods, which makes it cost-prohibitive. OnQ may try scare tactics to "encourage" you to stick with them (via doomsday escrow fallout scenarios), but they cannot legally force you to use them.
Good luck.
Here's some similar discussion from another thread.
http://www.talkirvine.com/index.php/topic,11235.msg219034.html#msg219034lnc said:
http://www.talkirvine.com/index.php/topic,11735.0.htmlIrvinecommuter m[quote author=Irvinecommuter said:
sgip
Well-known member
The sales staff is under terrific pressure to get you to close with the in house lender. The tales they tell are astonishing. I had a closing last month (Non IP.. still...) where the sales staff threatened a zero hour cancellation if the buyer didn't make an "emergency application" with their lender. What was the emergency? The builder moved the closing date up by 24 hours and didn't tell us, therefore "your lender can't close on time!!!!" They say the closing is Friday but it's Thursday. Sign with our lender or we'll yank the deal". Other times it's "Oh, your lender hasn't updated us, we don't know what's going on" I've had to give some builder clients copies of my weekly status calls and emails to demonstrate what they hear at the sales office isn't the full story.
I understand that the sales staff might get in trouble if so many buyers go with an outside lender. No one wants an extra layer of job pressure if it can be avoided. A buyer though should be given a "pressure free" environment to go with whomever they wish. Sadly that's not often how things are handled today.
I understand that the sales staff might get in trouble if so many buyers go with an outside lender. No one wants an extra layer of job pressure if it can be avoided. A buyer though should be given a "pressure free" environment to go with whomever they wish. Sadly that's not often how things are handled today.
akirvine79
Member
I actually asked a simillar question couple months ago and some of TI Folks didn't recommend OnQ as above links show. So I was fully aware of that when I was selecting a lender. However, I ended up choosing OnQ and I'm actually closed with OnQ today, so let me share my experience with them.
I started loan shoppings approximately 3 month before COE, and my final candidates were OnQ and Wellsfargo. Many guys here recommended Wellsfargo and their rate was better than OnQ as TI folks said. At that time, the only reason I considered OnQ was they are builder's preferred lender and they guaranteed no-late-closing penalty even if delay is cuased by myself. And they gave me a written confirmation that my rate lock is guarantted until closing. On the other hand, Wellsfargo offered me .125 point charge for 15 days lock extension if my COE is delayed and 60 days lock period is over.
At that time I was about going with Wellsfargo due to their lower rate. However, when I told OnQ that I decided going with another lender, they asked me the reason and I said Wells offered me lower rate. Then they said, they can match not only Wellsfargo's but also any other lender's rate if I can show them other lender's written quotes. When you do a mortage shopping, lenders normally don't give you written quotes so it wasn't realistic offer but when I just showed them my email that contained wellsfargo's rate, they offered me the same rate as Wellsfargo's.
Once I lock the rate of OnQ's 30 years fixed product, right next day, I changed my mind and regreted I chose 30 years fixed product. I wasn't expecting that I could change the product after lock but when I asked, they withrawed previous rate lock and allowed me changing to ARM without any cost and even lower rate than previous day. (It also matched Wellsfargo's rate)
My cons for OnQ was, when I wanted to get a daily rate update, sometimes it was hard to reach their vice president guy because he was usually busy dealing with other customers and meetings. So most of time when I called him, I had to leave memo and he contacted me a few hours later. However, he never missed any response. Their vice president guy was a smooth talker and very professional, so I had no trouble talking with him.
Unlike other member's previous experience with OnQ, I had no complaint after rate lock. Everything was smooth and other staffs were very responsive. Even when I asked/requested something by email, their response was usually very quick (normally within 1 hour). They did a mistake just 3 days before COE, so I had to re-sign their loan documents but it didn't cause any delay on my closing date. So over all it was a very smooth and stress-free transaction with them.
Wellsfargo seemed to be good though. they had my own loan manager and it seems they have more staffs for my case, so communication wise they may provide better service than small lenders. Apart from interest rate, their other charges were a little more expensive than OnQ and their home insurance quote was fairly expensive. Of course, OnQ doesn't have their own home insurance provider, so I was free to choose my own.
I started loan shoppings approximately 3 month before COE, and my final candidates were OnQ and Wellsfargo. Many guys here recommended Wellsfargo and their rate was better than OnQ as TI folks said. At that time, the only reason I considered OnQ was they are builder's preferred lender and they guaranteed no-late-closing penalty even if delay is cuased by myself. And they gave me a written confirmation that my rate lock is guarantted until closing. On the other hand, Wellsfargo offered me .125 point charge for 15 days lock extension if my COE is delayed and 60 days lock period is over.
At that time I was about going with Wellsfargo due to their lower rate. However, when I told OnQ that I decided going with another lender, they asked me the reason and I said Wells offered me lower rate. Then they said, they can match not only Wellsfargo's but also any other lender's rate if I can show them other lender's written quotes. When you do a mortage shopping, lenders normally don't give you written quotes so it wasn't realistic offer but when I just showed them my email that contained wellsfargo's rate, they offered me the same rate as Wellsfargo's.
Once I lock the rate of OnQ's 30 years fixed product, right next day, I changed my mind and regreted I chose 30 years fixed product. I wasn't expecting that I could change the product after lock but when I asked, they withrawed previous rate lock and allowed me changing to ARM without any cost and even lower rate than previous day. (It also matched Wellsfargo's rate)
My cons for OnQ was, when I wanted to get a daily rate update, sometimes it was hard to reach their vice president guy because he was usually busy dealing with other customers and meetings. So most of time when I called him, I had to leave memo and he contacted me a few hours later. However, he never missed any response. Their vice president guy was a smooth talker and very professional, so I had no trouble talking with him.
Unlike other member's previous experience with OnQ, I had no complaint after rate lock. Everything was smooth and other staffs were very responsive. Even when I asked/requested something by email, their response was usually very quick (normally within 1 hour). They did a mistake just 3 days before COE, so I had to re-sign their loan documents but it didn't cause any delay on my closing date. So over all it was a very smooth and stress-free transaction with them.
Wellsfargo seemed to be good though. they had my own loan manager and it seems they have more staffs for my case, so communication wise they may provide better service than small lenders. Apart from interest rate, their other charges were a little more expensive than OnQ and their home insurance quote was fairly expensive. Of course, OnQ doesn't have their own home insurance provider, so I was free to choose my own.
We also did close on time last week with OnQ and with no complaint, everything went very smoothly (they also made one mistake on one page of the loan doc where we had to resign but did not affect the closing).
I actually like their staff better than the VP, as they are both responsive and explain things from the customer's perspective. The VP tries a little bit too much scaring tactic and keep on saying how other lenders would screw up, and sometimes talks like he knows thing better than anyone else. Of course he is also the main sales people so that probably makes sense from their business perspective. Overall he is indeed knowledgeable though.
I actually like their staff better than the VP, as they are both responsive and explain things from the customer's perspective. The VP tries a little bit too much scaring tactic and keep on saying how other lenders would screw up, and sometimes talks like he knows thing better than anyone else. Of course he is also the main sales people so that probably makes sense from their business perspective. Overall he is indeed knowledgeable though.