When buying in a new home community, do you have to use the builder’s preferred lender, or can you choose your own mortgage professional for your home loan?
This is one of the most common questions we hear from our buyers, especially if it is their first time purchasing from a new home builder. The short answer is that, no, you are not required to use our (or any other builder’s) preferred lender. You can use any lender that you like or, if you’re purchasing the house with cash, no lender at all.
However, before you make a decision either way, be sure to ask whether the builder or their preferred lender offers any incentives for doing so.
What Is a Preferred Lender?
This term is used across the home-building industry to refer to a mortgage lender (broker or bank) that the builder has teamed up with for a particular project.
Although some builders may have their own in-house mortgage company, the builder is typically not affiliated in any way with the preferred lender. Nor does the builder receive any financial reward (sometimes called a kick-back) when a buyer uses the lender to obtain their home loan – that’s not only unethical but it’s generally illegal.
Instead, these lenders typically provide some type of financial incentive to the buyers who do choose to use them for their financing.
Pros & Cons of Using a Home Builder’s Preferred Lender
In most cases, either the builder or the recommended mortgage company may offer you one or more incentives if you choose that lender. They also make it much easier and faster for you to move the new home buying process along.
For many buyers, the convenience factor is the deciding point.
Some buyers express concerns that the recommended lender’s interest rates or fees may not be competitive with other mortgage companies’ rates. You are always free to consult with another home loan provider to compare rates. But, if you do find a slightly lower rate, be sure to compare the overall cost of financing once you deduct any incentives being offered by the builder or preferred lender.
Should You Use Wright Homes’ Preferred Lender?
In many of our new home communities, we team up with an unaffiliated, local mortgage lender to help our buyers realize their dream of owning a new home. We do this so that, when buyers choose one of our homes, we know the lender has a team dedicated to working exclusively with our clients. Our lender’s team is familiar with the community and our processes, and we know we can rely on them to get the job done for you. We also know that they will provide the level of excellent service that you deserve.
For example, at our Big Bend new home community in Herriman, we have teamed up with Security National Mortgage Company. Security National offers all the VA, FHA and conventional loans that other lenders have. If you do choose to work with Security National, you will enjoy a variety of financial incentives and convenience factors.
Incentives and offers can change, so be sure to check with our friendly and knowledgeable sales team to learn more about the current program – and don’t forget to tour our beautiful model homes what you’re there!
Wright Homes builds new home communities throughout northern Utah, including Draper, Herriman, St. George and Riverton. Contact us today to learn more about the advantages of using our preferred lender to purchase your new home.