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