Mister_me:
I recently built/bought a home with Dominion Homes near Columbus. Since you speak of them, I assume you live in either Columbus or Louisville ( those are Dominion’s markets ). February will be my sixth month in this home and I couldn’t be happier. My home is the Jefferson model from the Independence series and is legally classified (straight from my mortgage documents) as a single-family home in a condominium community.
To answer your questions:
- Yes and no. Do you want to beat the bank upfront or in the end? You be the judge. Before signing my purchase agreement, I called three local banks and none of them could offer me a mortgage like this. Their interest rates and closing costs were higher and they didn’t offer the same benefits. I have no doubt that I could not have afforded this house without the financing deal I received (see below). Additionally, I am not stupid. Dominion must be making a good chunk of change on the deal, so I would imagine that I am paying more in the end. I plan on this being a long-term stay of at least 5 years, not 50. Dominion developed the land, built the house, sold the house to me, financed the mortgage, and had their subsidary Alliance Title close the deal. At closing, 99% of their mortgages are sold to National City. They keep their costs down by doing everything and then washing their hands of you right away.
My finance deal:
Pay $500 for my purchase agreement. This contract specified all the details of my house and the mortgage I selected based on a 5.375% rate locked for up to 120 days. At this point my home had already begun construction, just the foundation in fact. The Independence series for Dominion allows little flexibility as far as options and colors are concerned. I had to select which floor plan I wanted and find a lot that had already been designated to build that plan in the pre-determined color scheme I wanted. Dominion has a picture in their head of what they want the outside of this neighborhood to look like and you can’t do much to change it.
After that you will go through a formal mortgage application process that costs you $125. Nothing out of the ordinary here.
And that’s it for before-closing costs!
My mortgage is a 30 year FHA fixed-rate loan at 5.375%. The first two years Dominion buys-down the interest rate to 3.375 and 4.375, respectively. I paid $0 down. How? FHA requires a minimum of 3% down, this requirement cannot be waived. You can, however have a certain amount of money gifted to you. So on the day of my closing, Dominion writes a check for 3% of my house to Nehemia. Nehemia is a not-for-profit organization. Nehemia then (still on closing day) writes me a check for 3% of my purchase price that I immediately sign-over to Alliance to close the gap between my mortgage amount and the purchase price. Basically, you see all these checks at closing going across the table, but you can’t have them! My out-of-pocket closing costs were $0 too. A misconception of this program is that you are not charged closing costs. That’s not true, Dominion rolls the closing costs into your mortgage so you ARE paying them. My mortgage does include PMI insurance as does any FHA with less than 20% equity. It also includes 6-month layoff protection that’s paid in-full by the mortgage-owner. The mortgage is fully assumable and does not have early payment penalties. Make sure you compare all aspects of competing banks’ mortgage programs.
At the end of closing, I was refunded the $625 that I previously spent and was given the keys to the castle. Not bad. The worst part about closing is all the signing you do and when they disclose to you the entire cost of your mortgage if you were to make 360 payments. :eek:
Why do this? In my case, I couldn’t afford to save the huge downpayment most new homeowners make (20%). I could however, afford the mortgage payment at that time with my earnings continuing to increase. Last year I had actually been in the process of saving for a downpayment when I decided to build/buy with Dominion. If I had continued down that path I would have had to nearly empty my bank account, buy a smaller condo or home (probably older) and have nothing on-hand in the event of an emergency. It enabled me to get into a house sooner than traditional methods and in my opinion, safer. Now I still have that money in the bank and warranties on everything from the range to the roof. I bought some nice furniture with a bit of that money and am now happy earning equity instead of burning cash with monthly rent.
- Well they have been building like crazy so maybe everyone is buying. Just have your brother and sister-in-law decide what is important to them and what exactly they want.
The downside to my deal: PMI, condo-association ($46/month), less flexibility.
If your relatives are in the Columbus area, I would recommend my Dominion sales representative. She was a life-saver and walked me through everything. Let me know if they’re interested.
Anyways, that’s my take on it. 
Best of luck,
-b
P.S. As far as people knocking the quality I can only attest to what I’ve experienced. I haven’t had any major issues yet and we’ve seen really bad weather so far this winter. This will be my sixth month and I’m starting to get some drywall cracks and nail pops. As I understand it, this is all pretty normal stuff with new houses as they settle. Another nicety about my builder is that they offer me a house-call up to one year from closing. In this house-call I can have them repair all that stuff and even things I may have missed at the walk-through on closing. For example, a drywall crack will be repaired properly and the entire wall repainted white unless you painted over it. In that case they just repair the crack and leave you to paint over the mud. Hey that’s less work for me!