The builder can do that to make sure you have the funds to purchase the home you contracted to purchase. However, they cannot force you to use their lender, unless you decide there is a financial (or otherwise) benefit for you. The same goes for the Title Company.
One word of caution: By allowing the builder to pre-approve you, you do reveal your personal and financial information to the builder's lender. Make sure, it is not used against you. Ideally, the other party, seller/builder, should NOT have access to the buyer's financial or personal information.