Do I Have to Use the Builder’s Lender When Buying a New Home?

Real Estate Broker/Owner with Aspen Lane Real Estate Colorful Colorado CRE# 40005863


Do I Have to Use the Builder’s Lender When Buying a New Home?


new construction in ColoradoThis is a frequently asked question from buyers when I am showing new construction in Colorado.  Many builders tie incentives and pricing to using their preferred lender.  Typically, if you use the builder’s preferred lender, you can expect to receive 2 to 3% in paid closing cost or sometimes a lump sum which you can use to reduce the price or cover part of the design center costs.


No one can force you to use any lender – even the builder.  Where you obtain your financing is totally your decision. 


I have worked with many builders in Colorado and most of the time, the builder’s lender is very competitive with interest rates and fees.  They are well versed in the builder requirements and know exactly who to turn to when documentation is needed. 


I always advise my buyers to compare the rates and fees associated with using a builder preferred lender.  If there is a huge difference between the builder’s lender and their lender, the builder will generally do what needs to be done to accommodate the buyer.


I have worked with Lennar Homes in Colorado for the past four years extensively.  Lennar offers a $10,000 incentive to the buyer when they use Lennar’s preferred lender.  Since Lennar offers the “Everything Included” concept of selling homes, there is never a design center upcharge.  Many people use this incentive to pay their closing cost AND reduce the price of their home.  This is a huge benefit for buyers looking for that perfect brand new home.



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Chris Ann Cleland
Long and Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Bristow, VA

It is always wise to look at the dollars and cents of what the cost, or savings, to use the builder's lender will be.  

Mar 01, 2013 02:44 AM #1
Judith Parker
ProStead Realty - Charlotte, NC
CRS, GRI, CMRS, Charlotte, NC

Hi Belinda, good post and I have had buyers use that money to buy down their rate so it really pays off.  Have a great afternoon!

Mar 01, 2013 03:07 AM #2
Anna Banana Kruchten - Phoenix Homes Sales
Phoenix Property Shoppe - Phoenix, AZ

Belinda this is so confusing to many new home buyers.  You make it easy to understand.  Excellent!!

Mar 01, 2013 03:40 AM #3
Scott Larson
BHHS/Utah Properties - Park City, UT
Park City, Utah Real Estate News

Belinda, excellent post.  That sounds like a great program at Lennar, but yes, buyers should be educated that they are should never be forced to use any service provider they do not want to.  Everyone should have choices.

Mar 01, 2013 03:51 AM #4
Erin Bates
CMG Financial and Expansion Marketing Services - Aurora, CO

Great post - obviously some people have their own "buddy" that they want to use to buy their home, but, why wouldn't you jump on these great incentives!!

Mar 01, 2013 06:26 AM #5
Belinda Spillman
Aspen Lane Real Estate Colorful Colorado - Aurora, CO
Colorado Living!
The incentives offered by builders are so great. They are hard to pass up
Mar 01, 2013 11:38 AM #6
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Very good advice for home buyers.  It is always a good idea to compare the actual costs to use an alternative lender.

Mar 02, 2013 04:18 AM #7
Julie Chapman
DR Horton - Lakeland, FL
New Homes Sales Lakeland Florida

homes brunswick ga for sale - short sales brunswick ga


Congratulations on the featured post in the New Home Sales Group. Thank you for your continued support and contributions to the group.

Mar 05, 2013 01:44 PM #8
Elizabeth Bouchard
Long & Foster Realtors - Arlington, VA
Associate Broker in Northern Virginia

Good advice to compare the actual rates and fees.  But having worked in sales and marketing for homebuilders for many years, I always felt the builder's recommended lender would go the extra mile to make a close deal go through.  Not always the case with a lender who is just handling that one transaction.

Sep 12, 2013 01:50 AM #10
Ilyce Glink
Think Glink Media - Chicago, IL
Best-selling author, award-winning TV/radio host.

Belinda, great post and advice on having buyers compare the rates and fees associated with using a builder preferred lender. Thanks for sharing.




Oct 25, 2013 04:25 AM #11
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Belinda Spillman

Colorado Living!
Your Colorado Real Estate Resource
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