Your help please. I need the company names and phones of lenders who will allow rebates to buyers, excess of buyer closing costs please. I was speaking to a home mortgage broker in Houston, who has 25 years of experience (started when she was 5 years old).
I suggested that she could send me buyer referrals. Since Texas made rebates legal in 2010, she agreed that the rebates could only pay for buyer closing costs.
However
if rebates exceed buyer closing costs, I could not reduce the loan amount with money from rebates and buyer could not get cash back at closing or after closing (even if it is disclosed to all parties).
She knows of NO LENDERS who will all rebates to help with buyer down payment. This means that the buyer only gets benefit of rebate (from buyer broker) to the extent of buyer closing costs. Buyer broker must keep the overage rebate, even though it exceeds the previously agreed upon buyer consulting fees. Or buyer broker can give the money to buyer's favorite charity, but the buyer can not use rebate for down payment.
So my mortgage broker friend needs the company names and phone numbers of lenders who will allow rebates in excess of buyer closing costs.
Lester Langdon cell 281 236 8189
Lester, Has she or you considered doing an ammendment to the agreement of sale that lowers the price of the home by the agreed upon buyers broker - agent commission, effectivly accomplishing the same objective? The money is not being used as a down payment. Theoretically, for instance, you are being handed $10,000 for a $6,000. job, you owe change, not a rebate.
Lester~Good to speak with you this morning. I have emailed my primary lender and explained ACRE to him asking him to please fill me in on their policies and procedures for rebating from the lending side of the picture. When I receive his answer I will share what I have learned here. I showed a man one of our listings a few weeks ago and he mentioned that he had worked with a buyer agent (hadn't signed a buyer rep with them though) and that the agent said it was their company policy to rebate 1% of their buyer agent commission to him and asked if I would do the same, since he found the house himself and I would only be writing the offer and doing contract to close, I told him I would do that as well. I would really like to hear what the lending community has to say about this practice and what the guidelines are. Also if and how they vary state to state. I am in Texas by the way.
Talked to the mortgage broker about the suggestion from Glenn Freezman.
With $300,000 home and 3% = $9,000 commission to buyer agent.
$4,000 to consultant/broker leaves $5,000 for closing costs which could easily happen, thus not needing to reduce the sales price. Buyer could buy a point buy down for approx $3,000 plus other closing costs. But Glenn's idea is great in the event that the additional $5,000 is more that closing costs. Thanks Glenn.
lester, i wonder what the savings are over the life of the loan with a point reductiion wow thats brilliant. that could be a boatload of money. uh-oh im getting the excited knot in the stomache.
if they bought the rate down by a point of the $240,000 mortgage, I assume that the home was $300,000 and the mortgage at 80%. Using todays rates the borrower could save the differnece between 4 1/2 and 4 1/8, approximatelty. This is $53.00 per month or $19,080 over the life of the loan. The borrower also still has, by your example, $1000.oo to put towards closing costs or the reduction of the price. great find LESTER