Maybe dirt-cheap financing will get potential home buyers off the picket fence.
Toll Brothers
Mortgage rates are low, but they are certainly not that low. Bankrate
Is there a catch? Oh, there are several. Buyers must have credit scores of 720 or greater, pay at least 20% down, and the loans can't be for greater than $417,000. The biggest catch of all, of course, is that a buyer has to be brave enough to weather the trend of slumping home prices and be willing to take a chance.
However, for an industry that has been in a precipitous decline for several quarters, it's certainly worth a shot.
The move is likely to attract math-savvy home buyers. The difference between a $400,000 mortgage at 3.99% and 5.44% breaks out to more than $4,000 a year (before any taxable benefits, naturally).
Toll isn't revealing its funding source. If it is willing to subsidize part of the cost, it will be going where realtors and lenders can't go in the resale market. Sure, desperate sellers may offer owner financing at ridiculous rates, but Toll's effort gives it a nationally-orchestrated effort in moving its digs.
I have certainly been harsh on the home builders. I took shots at Lennar
I even gave Toll the "Throw This Stock Away" tribute two months ago, suggesting that investors looking for real estate plays avoid the home builders and focus instead on companies like Bankrate, Chinese real estate agency E-House
However, I have always respected Toll for its healthier balance sheet relative to its overly leveraged competitors. Toll's flexibility is now giving it the opportunity to turn heads with dirt-cheap mortgages. Now let's see if it can turn homes.
Other open houses to hit:
