Builder / Lender Relationships
Builder / Lender Relationships
Have you noticed all of the new construction homes being built lately? Or what about all of the apartment complexes that are being converted to condominiums? It would be hard to have not seen them. There is new construction and conversions everywhere! That’s not a bad thing. The new homes being built these days are beautiful. And most people that are considering the purchase of a home at least think about these new construction homes. But before you go diving into the purchase, here’s something to think about.
As you go to the site, whether it’s a condo conversion or new construction homes, you will mostly likely see something about their ‘preferred lender’ bonus. Usually they’ll call it a ‘Buyer Bonus’ and they’ll give the buyer $5000 or something. That’s great, right? Sure it is. It can go towards closing costs and you can bring less cash into closing.
But, don’t just do it without talking to another mortgage broker too. These ‘preferred lenders’ are typically banks that work with the builders and they have special relationships with each other. That alone isn’t a bad thing. But you might not get the best interest rate or loan structure by going with them. (see previous post - "Choosing the Right Mortgage Broker")
The big question becomes is it worth the $5000 savings to have a higher interest rate that will make you pay possibly $10-15,000 over the life of the loan? Perhaps. It depends on the buyer. It’s just something that should be checked out. Don’t limit yourself to only that preferred lender. It’s always a good idea to talk to someone else too that might be able to save you much more than that $5000.
Don’t stay away from them, but just know your options.
To search listings, view current market information, and many other resources - visit www.soderlundhomes.com.
Good luck!
Aaron
Have you noticed all of the new construction homes being built lately? Or what about all of the apartment complexes that are being converted to condominiums? It would be hard to have not seen them. There is new construction and conversions everywhere! That’s not a bad thing. The new homes being built these days are beautiful. And most people that are considering the purchase of a home at least think about these new construction homes. But before you go diving into the purchase, here’s something to think about.
As you go to the site, whether it’s a condo conversion or new construction homes, you will mostly likely see something about their ‘preferred lender’ bonus. Usually they’ll call it a ‘Buyer Bonus’ and they’ll give the buyer $5000 or something. That’s great, right? Sure it is. It can go towards closing costs and you can bring less cash into closing.
But, don’t just do it without talking to another mortgage broker too. These ‘preferred lenders’ are typically banks that work with the builders and they have special relationships with each other. That alone isn’t a bad thing. But you might not get the best interest rate or loan structure by going with them. (see previous post - "Choosing the Right Mortgage Broker")
The big question becomes is it worth the $5000 savings to have a higher interest rate that will make you pay possibly $10-15,000 over the life of the loan? Perhaps. It depends on the buyer. It’s just something that should be checked out. Don’t limit yourself to only that preferred lender. It’s always a good idea to talk to someone else too that might be able to save you much more than that $5000.
Don’t stay away from them, but just know your options.
To search listings, view current market information, and many other resources - visit www.soderlundhomes.com.
Good luck!
Aaron
posted by Soderulnd Homes at
3:51 PM
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