LGI Homes 2 Bad Experiences Conroe Texas

My husband and I have had 2 bad experiences with this company.  

First was with the first salesperson in the Tomball location.  My husband is a driver, hes not paid hourly or salary, so he has to have 2 full years on the job with 2 years of tax returns and w-2s or 1099s.  When he first went in he was upfront with the sales lady and explained that he didn't have 2 years, he had 1.  She said it wouldn't be a problem.  They were working on a USDA $0 down loan.  At the time, the credit requirement is a 620.  She ran his credit, he only needed a few points, and she told him exactly what to pay on each credit card to maximize the score.  He went in again, put the $500 earnst money down (This is very common, you do this with ANY house you purchase, it protects the seller as well as the buyer); they put in for a quick score and then he picked the lot he wanted.  He was looking at around $1250 for the Driftwood after mortgage, taxes, insurance, etc.  A week went by, no phone call.  During this week, he tried to call her several times for an update; she never returned his call. Almost 2 weeks later he got in touch with her.  The score came back, the credit is good, now he needs to come in and sit down with the mortgage person.  When he came in he learned that the lot he wanted was no longer available.   BEWARE:  When you put down the money and you think you are getting a certain house or a certain lot, you need to get that lot and house in writing!  The money you put down guarantees you a house, but it may not be the floorplan you want or the lot you want.  So if you are only interested in 1 specific floorplan, you need to get it in writing.
He met with the mortgage person and after a 2 minute conversation, they said that he didn't have 2 years on the job and therefore wasn't qualified until another year has gone by.  

My biggest complaint is with the sales person.  He was VERY VERY clear that he didn't have 2 years, and she said that wasn't a problem.  He also explained he isn't paid hourly or salary, again she said it wasn't a problem.  So after weeks of going back and forth, putting down the money and all the run around, in the end his time on the job stopped the entire process.

Our 2nd experience:  In the Lake Conroe/Woodlands area.  My husband was against going with LGI again.  I wanted to at least look at them.  So I contacted them through their website and someone called me the next day.  I have an identity theft issue; there is a lot on my credit that isn't mine (we have been dealing with it for 5 years now, when we get one thing taken off something new pops back on).  We planned on using just my husband's credit and income for the mortgage.  Unfortunately being Texas, to qualify for the $0 down, they take into consideration my collections.  We have an outside mortgage broker we have worked with.  he suggested a divorce until the mortgage is finalized.  In all honesty, as radical as it sounds, we were considering it.

So, to make a long story longer...I explained all of that to the sales person that called me.  She seemed really nice, very attentive and I sent her a copy of the credit report our mortgage broker pulled.  It is both my husband and my credit from all 3 bureaus and all 3 credit scores for both of us.  She looked it over as well as her boss and they both thought that they could help us without us having to file for divorce.  So we scheduled an appointment to go look.  I was very clear that we needed a 3 bedroom with an additional living space or a 4 bedroom.  Because neither of their 3 bedrooms have additional living space, it has to be the 4 bedroom or 5 bedroom plan.

I'm going to run some numbers so you can see exactly what we were looking at.

Driftwood:  advertised price $989 / mo (I know that you add a few hundred dollars for taxes and insurance)
Cypress:  advertised price $939 / mo
Sabine:  advertised price $839 / mo
Blanco:  advertised price $749 / mo

The way they work your credit and find out how much you can afford every month is take all of the debt off your credit report (car payment, credit card payment, loans, etc.) and add it all up.  Your mortgage with taxes and insurance PLUS all of your debt can equal no more than 49% of your monthly gross income.

For example:  if you take the last 2 years of income (from w2s and 1040s) and add it together then divide by 24; you will get your monthly gross income; let's say it is $4,000 a month.  49% of that would be $1,960.  Your mortgage and your monthly debt cannot exceed $1,960 a month.  If you have $700 in monthly debt (on credit report) you would qualify for a mortgage of $1,260.  

Our income is higher and debt is lower, so we technically qualify for about $1650 a month in a mortgage.  We said our budget though is $1300 max.  She told us that the ONLY floorplan that would qualify for that budget is the blanco; the smallest 3 bedroom.  And even then it would be around $1350 a month.  That is $601 a month more than their advertised price; so that is $601 in taxes and insurance.  $7,200 a year.  She said that we were lucky too, because that area doesn't have the MUD tax.

I didn't really look at the floorplans for the 3 bedrooms.  I told her I'd like to see it before we proceed.  Maybe I could make it work (I HAVE to have a private area for my office, it is a stipulation of employment when bringing any work home, because I work with medical records I can't have anything out where someone can walk by and see anything).

The sales person told me that she can't show me the house.  We can't look at any house until they run our credit and she gets approval from her supervisor.  Even though she had our credit report in her hands, they have to run their own before they can show the house.

We told her that until I could see the house and see if it's even something I would be willing to pay $1350 for, I won't run my credit again.  So we were at an impass.  We didn't HAVE to get this house.  We do have other options.  We can go through USDA and get a $0 down loan; we can go through the first time homebuyer program and work with an FHA loan, or we can go conventional and just save up for a down payment and closing costs.  She then tried to tell us that if we go through the conventional we will have to come up with $10 0 $12 thousand dollars for down payment and closing costs.  And if we want to do a $0 down loan we can ONLY buy NEW.

All in all I wasn't impressed with their entire setup.  I know what options are available to me.  My husband actually has pretty good credit.  I know that we can go through USDA, I know we can go with a first time home buyers program.  I know we don't HAVE to buy NEW.  I really didn't appreciate being told otherwise when an outside mortgage broker just gave me all of my options.  I have looked at other builders, such as Lennar.  When we walked into Lennar, they pointed us in the direction of the models and let us walk through.  They gave us a brochure with floorplans, prices, neighborhood ammenities and even showed us the color options that we could pick out as long as the house wasn't already finished or mostly finished.  

Telling a potential customer that you can only show them a house AFTER you run their credit is a really bad way of doing business.  I get the feeling that LGI specilizes in people that can't get a traditional mortgage.  But ask yourself, is that really someone you want to do business with?  Are your neighbors people you really want to live next to in 5 years when the house needs repairs and they can't or won't make them?

I cannot review the quality of the home or the home warranty because I was never able to look at a house.  I can just review the 2 experiences we had with 2 sales people.  I really hope these 2 sales people are the exception and not the rule when it comes to LGI.