Why do builder’s offer incentives to use their mortgage lender?
A new home builder has a lot at stake with a subdivision. Not only might they be building your next home, but they could also be working on dozens others in the same community, and may have dozens or hundreds of subdivisions nationwide depending on the size of the builder. New home builders have a lot of money on the line. They could have tens of millions of dollars in homes underway. New home builders want to have the piece of mind that if they’re going to build you a home that not only you’re qualified but that you will close on time. Unfortunately, not all mortgage loan originators and mortgage companies are created equal. If they can have control of that process, they’re willing to pay a price to do so.
Are builder’s mortgage companies typically more expensive?
A builder’s mortgage company is often more expensive than the national average rates because they have a steady stream of business. Unfortunately, their service levels aren’t always there because loan originators know that they’ll continue working with home buyers and getting deals. This isn’t the case with all builders but many new home buyers experience this.
How we BEAT the builder’s mortgage company?
Because we keep our costs low and pass along our savings, our normal rate and fee offerings can be BETTER than the builder’s mortgage comapny’s offering even with the builder’s incentive.
EXAMPLE: A builder is offering their standard interest rate of 5.000% with their standard processing/underwriting fees of $1500 and the builder is willing to give you $5000 towards closing costs if you use their builder. There is a very good chance that we’d be able to offer you a lower rate, with no processing or underwriting fees, AND still offer a lender credit to pay for your closing costs.
Do we have to use the builder’s lender?
NO. They cannot force you to use their lender. They can however request that you prequalify with their lender which is reasonable seeing that they’re going to spends hundreds of thousands of dollars building a home for you. We’re always willing to help you compare options and see if we can get a better deal on your new home.