We're looking at the Bauer Landing development in Hockley, just northwest of Houston. What is the opinion of this company and this development? We are first time home buyers and aren't sure how good of a deal these homes are. We'd be in for a 4.125% fixed interest rate for 30 years.

That rate is above the market rate. What are they offering you in exchange?

They come with all appliances, besides washer and dryer with 5 year warranties (only 2 years of full coverage). Only $1000 for closing, they cover the rest. And that interest rate is for only putting $6500 as a down payment. Our income is around 100k and that rate was with an FHA loan.

The appliance deal isn't that great. Out of all of the houses and rentals we've owned we've never needed repairs on an appliance 5 years old or less. I thought new construction typically came with them anyway, except possibly for the refrigerator.

That rate for an FHA loan is not good. You're paying for the appliances in the cost of the home. You're paying all you're closing costs and theirs in the premium priced rate.

As was mentioned houses come with appliances.

Their hope is you don't compare it to the market and find out what's happening to you.

I'm guessing you aren't using an agent and listening to the builders sales rep. Not a good idea

Could we use an agent and still buy in this development? We are really only interested in buying new. We like the location and the size of the houses, so we just went to the location to get information on them. What is a fair interest rate we should expect?

Yes you can use an agent and from the sound of it you should.

FHA loans should be lower 3's right now.

What they'll try to do is sell you a package deal - house and financing together. They'll tell you they're offering incentives for using a particular lender. I think you already are seeing that's not really true. As you've described it they've offered you a premium priced loan that charges you for your costs and theirs.

Ask yourself this. Does it make sense that a builder and lender, both for profit enterprises, would want to give you anything for free?

What's the appeal of that location? The traffic is an absolute beat down.

As jja said, the builder partners with a Lender to make money, not save you money. They will tell you that if you use their Lender that you will save X amount and they will throw all this other stuff in free. Ask yourself, why would the builder care who used to buy their home as long as it gets sold? I understand the builder wanting to make sure that the buyer is well qualified but it's definitely a business relationship between builder and preferred lender. If you'd like to speak with someone about representing you, my email is chad@teamcrider.com

coming from someone who did the exact same thing when he was 24-25 yrs old, dont do it...
Its a ****ty deal financing wise. Save up some more money and try to do a 80 10/10 mortgage.

FHA loans aren't bad in and of themselves. I would think long and hard about this builder and this development.

This is really one of the few builders I would stay away from.

These neighborhoods, at least here in San Antonio, never end well.
I've been told, and I'm not sure about the accuracy of this in the end, but some builders won't develop near LGI properties.

I'd find yourself a nice small previously built home in a more established neighborhood. (something I almost always recommend instead of building yourself)

Find a 3 year old house in a nice aubdivision. Let the original owner take the pantsing.

A lot of the no down payment stuff was a big red flag to me too. How's KB these days? Still have the same sort of reputation?

I've got more money to put towards down payment. Are these houses a decent enough deal for 184k? I knew the 4% financing didn't sound ideal, but I'm looking at the house with stainless appliances. What would a fair price the houses themselves? Financing aside.

You should discuss price with a Realtor. That sounds really high to me. I pass buy there frequently and assumed they topped out around $130K.

We did the civil engineering out there. So the roads, utilities and drainage should be good! Also, get a lot that backs up to the drive-in so you can watch lots of movies!

29020 backs up at 5PM on Saturdays to get into Showboat. People sit on the side of the road for 3 hours until it gets dark. It's a cluster right there by the subdivision.