Posted on: 15th Oct, 2008 08:39 am
Last week I cancelled a deal on a condo that my fiance and I were looking at because we couldn't reach an agreeement with the contract.
525K condo (scheduled to be finished sometime in December)
10% down payment
Borrowing about 475K
The sellers agent contacted me again saying that the builder is willing to gurantee me a 5.5% interest rate if i go with the loan officer that he's been dealing with at Chase. I called the officer at chase and he basically told me that they have a working relationship with the builder and he will basically pay the points to get me to 5.5% when we close sometime in Feb or March of 2009. They are banking that the conforming loan limit will rise from 417K to closer to 500K and that the interest rate will dip back into the high 5's where even if the seller has to pay points it wouldn't cost him that much. He supposidly rather pay 15-20k in points then lower the price of his condos.
This just sounds too good to be true doesn't it? I've been dealing with another rep from Chase prior to this and he says that it sounds like the seller wants to lock you in on the deal holding on to your down payment. Worse case if the rates don't drop like he hopes he could just back out of the deal since i can't get the 5.5% rate and I could get my down payment back. He doesn't lose anything but I would lose months from buying a condo and not having my downpayment during this time.
Has anyone heard of this tactic before? Legit or stay far and away?
Thanks in advance
Alan
525K condo (scheduled to be finished sometime in December)
10% down payment
Borrowing about 475K
The sellers agent contacted me again saying that the builder is willing to gurantee me a 5.5% interest rate if i go with the loan officer that he's been dealing with at Chase. I called the officer at chase and he basically told me that they have a working relationship with the builder and he will basically pay the points to get me to 5.5% when we close sometime in Feb or March of 2009. They are banking that the conforming loan limit will rise from 417K to closer to 500K and that the interest rate will dip back into the high 5's where even if the seller has to pay points it wouldn't cost him that much. He supposidly rather pay 15-20k in points then lower the price of his condos.
This just sounds too good to be true doesn't it? I've been dealing with another rep from Chase prior to this and he says that it sounds like the seller wants to lock you in on the deal holding on to your down payment. Worse case if the rates don't drop like he hopes he could just back out of the deal since i can't get the 5.5% rate and I could get my down payment back. He doesn't lose anything but I would lose months from buying a condo and not having my downpayment during this time.
Has anyone heard of this tactic before? Legit or stay far and away?
Thanks in advance
Alan
Hi Alan L,
I think its better you called off the deal. In my opinion the other representative from Chase is right in saying that "the seller wants to lock you in on the deal holding on to your down payment". Its better if you could find some other seller.
Thanks.
I think its better you called off the deal. In my opinion the other representative from Chase is right in saying that "the seller wants to lock you in on the deal holding on to your down payment". Its better if you could find some other seller.
Thanks.