Today’s Home Buyer Tip: When buying a new home, are the builder’s lender incentives worth it?
You’ve probably already spent time calculating your mortgage to try to figure out the costs of a new home. When shopping for new construction, you’ll often see the builder offering incentives if you use their preferred mortgage provider. They may offer $5,000 towards upgrades and options, which sounds great, and, in some cases, it is a good deal. But you won’t know for sure until you compare the Loan Estimate they provide with a competing lender’s loan estimate. Loan Estimate is a technical term for a government form that the lender must provide when you’re applying for a mortgage. It’s especially important to request these estimates from both lenders on the same day. Because rates are always changing, same day quotes are the only way to ensure an apples to apples comparison. Loan closing costs and interest rates can vary significantly between lenders; that $5,000 credit may not be worth it if you’re paying a few thousand dollars more in closing costs combined with a higher interest rate.
We’re happy to provide a mortgage referral to help you shop your builder’s lender. Contact us to learn more.