New Homes & Lifestyles

Choosing A Mortgage Lender... Tips From the Inside - Choosing a mortgage lender is an important step in purchasing a new home. Before you take the mortgage plunge, you’ll want to hear what an insider has to say about the advantages of going with a build

iNest is a real estate broker that focuses exclusively on newly constructed homes. Given that iNest is a subsidiary of Lending Tree, you may find their advice a bit surprising. While they suggest that prospective new home buyers determine how much they can afford by getting prequalified for a loan using iNest's parent company, Lending Tree, almost 80% of iNest's clients end up utilizing the builder's preferred or in-house lender when they buy their homes.



Lending Tree, the leading online lending exchange, is recommended as valuable resource in getting pre-qualified for a loan. Simply filling out one form allows consumers to choose from up to four competitive loan offers from major, national, regional, and local Lenders across the U.S. In many cases, Lending Tree becomes the source of the home buyers mortgage. However, builders usually have either their own preferred lender or an in-house mortgage company owned by the same entity that owns the builder AND they my tie any and all incentive monies for upgrades or financing costs to your using that lender.  Seem coercive? You don't have to take the builder up on the $10,000 towards design center upgrades or to be used towards non-recurring closing costs, but it may be tough to pass up, especially when an incentive can get you that granite counter top upgrade you otherwise may not have been able to afford.



Additionally, the in-house or preferred lender is usually already in the possession of all the necessary public reports, homeowner's association paperwork (if applicable), master government appraisals for FHA and VA loans, and already understands the builder's purchase agreements and addendums, so that there isn't any last minute scrambling at closing time. The builder can hold its own lender accountable for providing the final dollars to its qualified buyers, and ultimately to itself, making it possible to lessen the carry-time on a new home.



Buyers who decide to use an outside lender will ultimately be responsible for communication between their lender and their builder. Buyers will need to make sure their lender faxes or calls the builder frequently to report on the buyer's loan status. Decide when to lock your interest rate; builders may not advise you when it may be best to lock, since they are not obligated by your lender.



So while it makes good sense to explore all your mortgage options when purchasing a newly constructed home, make sure to look into the builders' preferred or in-house lender before you make your decision.