Should I trust the builder's lender?
They're preferred for a reason. Let's find out whose preference.
Example situation
“The builder's lender is offering 6.75% with $12k in closing cost credits. My buyer's mortgage broker has 6.25% with zero credits. The builder says they'll pull the $12k incentive if we don't use their lender. My buyer's credit score is 760. I think the builder's lender is padding the rate but I need to prove it.”
Judgment —
Your instinct is right. The builder's lender is more expensive over time.
Reality —
At 6.75% vs 6.25% on a typical $400k loan, your buyer pays $133/mo more with the builder's lender. That's $47,880 over 30 years. The $12k credit covers the first 7.5 years of the rate difference — after that, your buyer is paying pure overage. With a 760 credit score, your buyer qualifies for competitive rates anywhere. The builder's lender isn't offering a deal — they're offering a trade: $12k now for $48k later.
Cost —
Builder's lender: $12k saved at closing, $47,880 in extra interest. Net cost: $35,880. Your buyer's lender: $0 at closing, $0 extra interest. The builder's lender also typically charges higher origination fees and junk fees buried in the LE. Compare line by line.
Move:
Ask the builder for the incentive with no lender requirement. If they refuse, ask their lender to match 6.25% and keep the credit. If that fails too, keep your buyer's lender and negotiate $6k off the base price instead. Builders have margin — the preferred lender relationship is profit for them, not a favor to you.
Real OneShot output — 1 input, 1 answer, no comfort