Sneaky Loans from Builders

You’re buying new construction and the builder offers you a "credit" or other "great deal" if you use their lender. Is it true?

The Sales Pitch

Usually, the pitch goes like this: "Use our lender and we’ll credit you two points or $10,000 towards your closing costs." Wow, sounds great, doesn’t it? Guess again!

The Inside Secret

Why would a builder offer such a deal? Because they are making money on your loan in addition to the house. The secret is that they are charging you extra, then offering the "discount." In other words, they markup your loan cost and then give it back to you. If they add $5000 to the cost and then subtract $5000, how much have you saved? If you said zero, you are correct. And, what if they have marked it up more than the offered savings? You lose.

How Can You be Sure?

To verify the offer, ask for a "Good Faith Estimate" (GFE). Compare the debits and credits and see what you are being charged versus what is being given back. Pay attention to junk fees and other important-sounding fees that are added just to pad their bottom line.

Next, call us for a quote to see how the builder’s rate compares to our rate. If you would like help understanding the GFE, fax it to us and we’ll explain it to you, no charge or obligation.

How to Get the Best Rate

We shop your loan among our wholesale lenders and investors to get you the best rate. We give you a quote and explain everything up front. We don’t subtract here only after adding there. We give you a guaranteed GFE with no junk fees. We don’t play games with your loan — we want future referrals from you and earn that by providing exceptional trust, service and results.

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