Why Use a Preferred Lender
As you shop for your new home and visit sales offices, you may be finding that most builders want to refer you to their chosen lenders. While this practice may be surprising at first, in most cases it is beneficial to you as the purchaser. How does the builder’s relationship with a lender benefit you?
The benefits run from the financial to the practical to the logistical. The relationship means that the builder is driving as much of his business to that lender as he can. The result is that the lender will process his clients’ loan application in a more timely fashion. The lender also will be more likely to spend time working with you, helping to solve problems or glitches that may arise during the process, including any credit problems. The lender will have the combined motivation of satisfying the builder to
continue to capture his business, and making you, the purchaser/borrower, a happy client.
The financial benefit is also important. Builders will often provide more closing help or special options if you use their chosen lender. The reason for that is simple: due to the ongoing relationship with the builder, the lender will reduce some of his profit on making the loan and pass that savings back to the builder for options or other incentives that will be offered to you.
Do your research, but don’t automatically discount working with the builder’s lender. It could mean the difference between creating a home you love with the options you want, and making a compromise you might regret down the road.
A preferred lender will be more likely to spend time working with you, helping to solve problems or glitches that might arise during the process
Which Financing is Right for you?
Different Loan Structures Can Make a Big Difference in Your Bottom Line
Covell Communities understands that purchasing a new home is a tremendous decision and could be the largest investment you will make. Among the many choices you will face, one of the most important will be how to finance your new home. Multiple options exist; our lenders can work with you to find the program best suited to you.
Construction to Permanent Cash
- Buyer pays cash in installments over course of construction process
- Settlement occurs before construction begins
- Closing costs based on value of undeveloped land only, saving money
- Interest accrued on funds paid during construction credited back to buyer
Construction to Permanent Loan
- Our most popular financing program, in which loan closing occurs before construction begins
- Closing costs based on value of undeveloped land only, saving significant money
- Interest accrued on loan funds during construction credited back to the buyer
- Interest rates based on current market rates
- Available only through our preferred lenders
Fixed Rate vs. Adjustable Rate Loans
- Fixed interest rate doesn’t fluctuate during fixed-rate loan period
- Borrower can accurately predict future payments
- Adjustable Rate Mortgage typically offers lower initial interest rates than comparable fixed rate loan
- Can increase your purchasing power
End Loan
- Traditional mortgage in which you pay builder a deposit and then pay the rest upon home’s completion
- Closing costs based on value of developed land plus new house
- Interest rates based on time of future settlement
- Can be obtained from any bank you choose
- Availability can be limited since builder finances construction
Government Loans
- Federal Housing Administration (FHA) and Department of Veteran's Affairs (VA) offer government-insured loans
- Low down-payment requirements, more flexible guidelines
- Offered to individuals that qualify
