You can arrange mortgage financing for new home construction through your builder’s affiliated lender. Last time you purchased a new car, the dealer perhaps offered to arrange financing. Even electronics and furniture stores offer immediate approval if you sign up for their in-house credit cards. Home builders also want to be in the financing game. When you go to their sales offices, you’re most likely to be offered a home mortgage from the builder’s approved lenders. You can compare the interest rate of these loans through a loan mortgage calculator easily.
Pros of financing through your builder
The pros of financing new home construction through your builder’s affiliated lender are given below:
Convenience: Getting your home loan from your builder’s affiliated lender is likely to take less time than seeking approval from independent lenders. The reason is the affiliated lender is familiar with the builder; therefore two companies can share relevant information and speed up the processing time.
Greater likelihood of approval: As the builders want you to buy their homes; they are more likely to work with mortgage lenders who are likewise eager to grant your mortgage application. After all, their own income would be affected if their affiliated lenders reject too many potential buyers.
Incentives: Some builders may agree to reduce the value of a home from $5,000 to $10,000 provided you use one of their favored lenders. Non-financial incentives are becoming extremely popular too, with builders offering to throw in everything from TVs to backyard landscaping.
Flexible closing: You might have to delay closing when your home is not completed on time. During these cases, a builder’s lender might be more flexible to work with than an independent lender.
Cons of financing through your builder
The cons of financing new home construction through your builder’s affiliated lender are given below:
Higher rates and closing costs: According to the National Association of Mortgage Brokers (NAMB), affiliated lenders offer interest rates 1/8th to 1/4th % higher than what borrowers might get from an independent lender. Moreover, mortgages offered by affiliated lenders might carry higher closing costs. Thereby, you end up paying more in the long run. You can calculate the overall payments that you have to make with the help of a loan mortgage calculator without any problem.
Possible price manipulation: Although Federal rules specify that any price discount offered by builders for using one of their preferred lenders should provide genuine savings, you have to be careful that a discount incentive isn’t made up through charges hidden elsewhere.
You should take time to shop around for the best new home loan. You can check what the builder is offering and compare it with quotes from at least 3 outside lenders. You can compare the quotes with the help of a loan mortgage calculator.
I am a real estate and new home financing writer that enjoys riding horses and, you guessed it, writing. I guest post on several blogs and author my own blog related to outdoor horseback riding. 
Yes, it’s certainly convenient, but you worry about there trustworthiness. I guess it depends on the builder.