Builder’s Lenders - How to Compare 🚧 🏡

With inventory low, more home buyers are having to turn towards new construction. But when working with a builder, there's a couple things you should keep in mind. First and foremost, working with the builder's lender. I would say hundreds, if not thousands of times. I've heard clients that just get done talking to a builder's lender and they say, hey, I've got this awesome credit. They're giving us 20, $30,000. Think I'm going to go with them. Okay, here's a couple questions to ask back. What were the fees? What was the rate? Those are the three main pieces alongside the builder's credit. And if you don't know the rest of the story, well, you're in for a rude awakening. We've seen this happen countless times where somebody's getting a 30,000 dol dollar credit and it seems just absolutely fantastic. But then they're paying 30, $40,000 in fees to get that. We've seen that happen. I know it doesn't sound real, that's how it sometimes goes in the builders lenders world. But they understand they're going to sprinkle some huge incentive to go at them that the consumer will just stop and won't even think to ask the rest of the questions. And it's kind of interesting. They're a lender just like anybody else. Any other lender could do that same thing. There's a reason why the good mainstream traditional lenders don't do it in that weird backwards way. Hey, I'll give you a bunch of credit. Give me a bunch of money to give you that credit. So it's a we weird kind of. I don't want to say smoke and mirrors, but that's kind of the definition of it. And they have a higher interest rate generally. So the other thing is they usually can't lock in those numbers because they know that the new construction is 6, 812 months away from being completed. They're not going to lock that deal in until they're 30 days out from completion of the home. So they could dazzle it all up and give you some unbelievable looking numbers. But they're not real until they lock it in. And it could drastically change. We've had countless people call in, hey, I was going to get this great deal months ago and then they refreshed the numbers as we got 30, 45 days out from completion and oh my gosh, it's 10, $20,000 more expensive. The rate went up a half or a whole percent. That's the thing. That is why I'm making this video. So ask the questions. Ask when they're going to lock it, when it's getting real to put the whole thing together. Because how good of a deal is it if you're paying abnormally amount, large amount of money to pretty much pay for that credit that you're getting? And final piece, even if all that comes together and it looks like it's a pretty okay deal, it doesn't mean that we can't beat it or some other bank or lender can't beat it. They just set it up in a very odd way. The fees in the rate are always to kind of offset the credit. They're getting that money from somewhere, they just move it around and it appears different, it's unique and it's different. And I guess it's a catchy way to market it. But we all kind of know in today's mortgage world that rates are kind of trending in a better direction. Big picture. In the next six to 12 months, high likelihood rates drop. So even if in a perfect world there is this huge credit for the builders lender, why would you apply that to buying down the interest rate? Because that's usually where they make you apply it to. Because rates are going to naturally fall on their own. Why don't you use that towards something like a tangible item on the house that's going to stick around, make that nice upgrade, get that fancy bathroom or kitchen or cabinets or whatever it might be. Use that towards something that's going to stick around. Rates are going to drop on their own. Don't throw that credit towards buying down your rate, which is naturally going to happen. You can refinance to that rate later, take full advantage of that credit to something that's going to stick around, even if it does come true, that their deal is really good. That's the best way to utilize it.