Adventures with NVR

I mentioned in an earlier post that we never really had any intention of building when we set out to find a home. Truthfully we were hoping to have something to move into by the middle of May and we will now be in limbo for a few months while building completes. We'd been comparing VA Loan rates and closing costs with Navy Federal Credit Union and USAA and planned to use one of those for our mortgage. After speaking with the Ryan Homes SR we learned that they will offer $5000 toward closing costs if you use their lender, NVR Mortgage. NVR is the parent company of Ryan Homes, NV Homes, Fox Ridge Homes. They then own NRV Mortgage and NVR Settlement Services which will provide settlement and title services. They keep it all very nicely in house.

We were immediately wary of using a mortgage company that was owned by the builder, our main concern being they would be looking out for Ryan Homes and not for us. You are perfectly welcome to use any lender you desire however you lose the closing cost incentive (but do not lose any of the home incentives). Additionally if you look up NRV Mortgage you don't see the most positive feedback, although it really seems as though the only people who post feedback are the angry ones. Anyway, we spoke to our assigned loan officer at NVR and were told their rate was currently 3.875% where as NFCU was currently 3.625%. We told her that, and she alluded to being able to match their rates when it came time to lock. That peaked our interest because $5000 toward closing is very nice, but they will make that back very fast by having a higher interest rate. Plus NFCU was offering $1500 toward closing so the difference in closing incentive was only $3500. Compare that to a 30yr loan with a higher interest rate and it's peanuts. 

After hanging up with her we just didn't feel overly confident about using NVR Mortgage. The phone call wasn't a bad experience, we just felt confident in the rate we could get with NFCU  whereas we weren't confident in NVR's ability to actually match what NFCU was offering. It really came down to being a bit distrustful of mortgage company and builder being owned by the same corporation. We received good faith estimates (GFE) from both NFCU and NVR and the prices were similar with NFCU having some higher costs and NVR  having some higher ones, however we did notice that many of NVR's costs were listed in ranges. Some of the price ranges were quite extensive and we were concerned what would happen if each item was at the highest end of the range.

We decided at this point to just use NFCU because we felt much more confident in the interest rate and closing costs. We emailed our LO and thanked her for her assistance while informing her we were going to use NFCU. I will say it bothered me a bit that we never received a reply, it felt a little petty.

Anyway we began the application process with NFCU who asked us to submit a ratified contract and at the time we were still waiting on signatures from Ryan Homes. After speaking to our SR we were told that we needed to apply for the loan in order to get the contract signed by Ryan. It seemed as though they nicely boxed us into a corner of at least having to apply for the loan through NVR. We spoke candidly with our SR about our concerns and he contacted the LO for us. She then called us and was more firm in her communication that they could match NFCU's rate. When it is time to lock in our interest rate we have to get a GFE from navy federal showing their current interest rate and if it is lower than NVR they state they will match it. Additionally we can still use NFCU if we want but they recommended applying through NVR so we could speed the process along, get the contact ratified and continue with the build process. The SR informed us that they won't begin purchasing materials for your home until you are approved for the loan because they want to make sure you are fully qualified to purchase the home. It costs $500 to apply through NVR and we were told that if we ended up going with NFCU we'd receive $450 of that back (the other $50 is for the credit check and is non refundable).

After speaking with the LO the second time we felt more confident in her promise to match NFCU's rate. She apologized for not communicating properly but informed us that she definitely could match NFCU's rate. Another thing to mention is that Ryan Homes added $7000 to the price of the loan for closing costs. With a VA loan you are unable to roll your closing costs into the loan, but the way around that seems to be to make the house price higher to cover closing costs. So according to NVR's GFE the $7000 in the loan plus the $5000 they will pay should leave us paying $0.80 out of pocket on closing day. That $7000 is in the loan regardless of which mortgage lender we choose.

So bottom line is we ended up applying through NVR and were approved for our loan. It just came out of underwriting yesterday in fact!! So now were are officially on our way!