Finding a mortgage is the second most important task you face behind actually finding your home.

And if you're buying a new home, your builder may offer you an incentive to use one of their preferred lenders.

This can take a chunk out of the money you need to come up with at closing time, or get you the carpet upgrade you otherwise may not have been able to add.

So is it worth it to take the incentive and go with the preferred lender?

First, builders cannot prevent you from using any lender you choose, be it your credit union or lender-cousin.

But if you do they simply are not bound to offer any of their own dollars in the form of incentive monies.

So why do builders sometimes "sweeten the pot," so to speak, for buyers to use a particular lender?

Builders need to try to have some "givens" and sense of accountability over the process when they are taking a considerable amount of risk in building and upgrading a new home to a buyer's specifications.

An in-house lender, whose first priority is its builder accounts, must make it their business to get buyers pre-approved in a timely fashion, educating the builder on whether it is prudent for them to take a particular home or home site off the market.

This is part of the well-oiled machine of the builder sales and construction personnel, lender, design center, and ultimately the buyer, who can be on the same page at the same time so that fewer details can fall through the cracks.

You still have a choice to go outside, but may not want to dismiss the incentives being offered, especially if they are financially meaningful to your bottom line.

Published: June 5, 2008

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