what should I expect when buying a new development? Is it better to use the builder's preferred lender?

Asked by C Wilson, Columbus, OH Mon Sep 19, 2011

Can the lender force you to use their preferred lenders?

Help the community by answering this question:

+ web reference
Web reference:

Answers

11
Bob Brandt, Agent, Schaumburg, IL
Thu Jul 11, 2013
The question is a couple years old.....
0 votes
Ken Frank, , Bolingbrook, IL
Thu Jul 11, 2013
No, With a broker we can get you the Best Rates and the best programs available.
0 votes
Cecelia Marl…, Mortgage Broker Or Lender, Chicago, IL
Tue Sep 20, 2011
Hello C Wilson,
I would say, work with whomever you have established trust. One of the most important pieces to a successful purchase is the buyer being able to trust the individuals they work with, this is inclusive of the Realtor, Builder, Lender, Attorney. Whomever, you hire to work for you should be looking out for your best interest. If the lender is already on the builder's team, there may be a conflict of interest. However, if you have met with the lender and you feel comfortable, ask for referrals of other people they have done business with recently. Make an educated decision from there.

Cecelia Marlow
Chicago Bancorp
Mortgage Banker
312-738-6294 direct
0 votes
Jerry Grodes…, Agent, LOda, IL
Tue Sep 20, 2011
C Wilson,
Always find and use full-time, professionals- who are working in your best interests. Remember the builders sweet little sales reps are working for the builder's best interests but would like you to think otherwise.
Shop lenders- the builder's deal may seem enticing but may often be matched by your own mortgage broker.
Use a Home Inspector- many people think because it is new construction they don't need this... but many problems can be found and addressed through a home inspection.
Most of all use a quality, full-time professional & experienced Realtor to safeguard your purchase. They'll have contacts for the above too.
Real life experience: I had a couple that refused to take me into their builder. The builder said they would "get the best deal that way". Strangely after the buyer got the alledged best deal, I convinced the buyer to let me negotiate with the builder. I was able to get the buyer -ALL the things on their wish (many they couldn't get), a reduction in price AND my commission was built in. I then safeguarded their transaction the rest of the way.
Broker Jerry Grodesky
0 votes
Sondra Savino…, , Oak Park, IL
Mon Sep 19, 2011
I have worked with new construction for years. First, you should use a lender that you feel confident and comfortable with and of course one that can actually get results. In new construction, sometimes the builder works with a specific lender because they may have programs or incentives that are offered specifically for new construction. It also depends if the property is a single family, condo or townhome as well as other factors regarding occupancy. Do your homework, let the prospecting lender know that the property you are considering is new construction as well as the property type.
In addition, surround yourself with a professional team that can guide you through this process. Work with a realtor, your personal advocate/negotiator-regardless what others may say, new construction is negotiable, you won't know unless you ask. Builders of new construction most often use their own contracts, therefore, don't overlook your right to an attorney. The attorney fee can cost you less than a potential issue in the future and she/he can review that bulders contract on your behalf. Last but not least, even though it is new construction, it does not mean that it is perfect. Hire a home inspector to come through, they can check the mechanicals of the home, appliances, electric and so on.
If you are looking for an advocate, check me out online, http://www.bairdwarner.com/Sondra.Savino
0 votes
Suzanne Hami…, Agent, Orland Park, IL
Mon Sep 19, 2011
No they can not force you. Builders always like you to use their preferred lender because it gives them more control over the transaction and gives them a level of comfort when building your home. It can be a good idea to do this. I would at least call their lender and then compare prices. Sometimes builders get a good deal for their clients. If all else is equal - ask the builder for a price or other concession if you use their lender.

Also - you didn't ask, but you can and should use a Realtor for new construction transactions. Someone who knows the ins and outs with building. I did new construction for years. You need to know what they are charging and why and if they are over charging. Negotiation with builders is possible these days, so you need to know. If you have contracted or even if you have been to their office, sometimes it is too late. Worth an ask. Let me know if you need more information.

Suzanne Hamilton
888-788-9544
RE Marketing Consultants
suzanne@remarketingconsultants.com
0 votes
Nichole Lat…, , Tinley Park, IL
Mon Sep 19, 2011
I WOULD DEFINITELY SHOP THAT MORTGAGE. IF YOU WOULD LIKE A REFERRAL FOR A LENDER, PLEASE CALL TERRY MAJICH AT GUARANTEED RATE AT 630-925-0130. HE IS VERY COMPETITIVE AND WILL GIVE YOU THE BEST RATE OUT THERE.
IF I CAN BE OF ANY ASSISTANCE, FEEL FREE TO CONTACT ME AT 708-646-6533.

GOOD LUCK,
NICHOLE LATHUS
COLDWELL BANKER RESIDENTIAL
0 votes
Alain Picard, Agent, Puyallup, WA
Mon Sep 19, 2011
I would shop around and use the lender that fits your needs the best. Using the builders preffered lender will sometimes get you incentives so you can ask them what they are offering but definitely I would shop around.
0 votes
Ron Thomas, Agent, Fresno, CA
Mon Sep 19, 2011
You should no more use THEIR Lender than you should use THEIR Agent:

You should take your Buyer's Agent with you on your first visit and you should find your own Mortgage Agent.
When you use their's, you are just lining their coffers.

No, they may not force you to use their anything.

Good luck and may God bless
0 votes
Deneen Ruffo…, Agent, Darien, IL
Mon Sep 19, 2011
SHOP THE MARKET....
If this is just an end mortgage and not a construction loan seek info else where!! You maynot be getting the BEST deal going with the buiulders lender, make sure you receive the lowest rate and lowest closings costs!!
Deneen Ruffolo
Realty Executives
630-430-2128
0 votes
Katherine Cr…, Agent, Bolingbrook, IL
Mon Sep 19, 2011
Hi C. Wilson,
I would recommend for you to talk to your bank for the new construction loan. Try to avoid lenders that the builder recommend.
Katherine Craff
Realty Executive
0 votes
Search Advice
Search
Ask our community a question
Home Buying in Bolingbrook Zip Codes

Email me when…

Learn more