Lennar Corp. is offering Chicago-area buyers some short-term bargain financing this month through its mortgage subsidiary.
“This is pretty common in one form or another and can be very profitable when the mortgage company is a corporate subsidiary,” said Steve Hovany, president of Schaumberg-based Strategy Planning Associates, Inc., housing consultants. It is also a way to promote sales of existing or nearly completed houses without further lowering prices and depressing values throughout a subdivision.
The Miami-based builder has offered this type program in Illinois and other locations nationwide since last fall, said John Mini, regional manager for Universal American Mortgage Company, the Lennar subsidiary originating the mortgage loans.
Buyers who can close by May 31 with a down payment of about 10 percent for most communities may qualify for a 30-year mortgage loan at 5.40 percent APR for most of its term, he explained
During the first two years of the loan, Lennar will underwrite part of the cost to lower the monthly payments. That reduces the interest rate by about 2 percent the first year and one percent the second.
As a result, the buyer who puts 10 percent down on a $190,990 house would save about $3,573 over the 24 months, Mini said.
The aim of the program is “inventory reduction,” said Leigh Nevers, vice president of sales and marketing for Lennar Chicago.
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