Struggling homebuilder Toll Brothers announced yesterday plans to offer 3.99 percent 30-year fixed-rate mortgages in an effort to spark flagging home sales.
The company said the deal is only good for conforming mortgages, those at $417,000 or less, for qualifying borrowers.
To take advantage of the mortgage rate special, borrowers need a Fico score of 720 or higher and a down payment of at least 20 percent.
The loan doesn’t carry any points paid by the buyer, but other junk fees are entirely possible.
The rate special is well below Freddie Mac’s average rate for a 30-year fixed mortgage this week, which increased to 5.12 percent from 4.96 percent last week.
It demonstrates the desperation felt by the nation’s top homebuilders, who have been scurrying to shed their stagnating inventories for years now.
In recent weeks, the National Association of Home Builders has been pushing for government aid to spark new home sales.
The group has lobbied for subsidized interest rates as low as 2.99 percent, along with an extended homebuyer tax credit.
NAHB boss Jerry Howard argued that recent home buyer promotions set at 4.50 percent weren’t enough to lift sales.
Of course, homebuilders don’t seem willing to lower their prices, as that would hit their wallet.
This is just another gimmick to lure buyers in at the wrong time.