The Benefits of Working with a Preferred Lender WHEN BUILDING YOUR NEW HOME
Posted April 25, 2022 in Special Features
Sponsored by HOLT HOMES, for The Columbian
The possibility of buying a home is an exciting time for most people. News of rising interest rates is a motivation for people to pursue buying or building a home this year in order to take advantage of rates while they are still low. Rather than waiting to find the right home in the existing inventory some buyers are choosing the path of new construction. With much of the nation still experiencing supply chain disruptions and labor shortages, the path of new home construction can take unforeseen twists and turns during the building process. Since it can take up to 12 months to a build a new home, financing can be another point of concern for buyers as rates change. This is why some builders prefer to work directly with their preferred lenders in order to streamline the financing process.
Holt Homes is one of the local builders in the Pacific Northwest that recognizes the benefit of working with preferred lenders in order to help pave the way to a smoother home buying experience. According to the builder, not all buyers are aware of the advantages of working with a preferred lender, especially when it comes to financing during a time of rising interest rates.
“Rates are changing from day to day and even hour to hour, which can significantly affect a buyer’s loan terms and monthly mortgage payments,” says Lizzie Levin, Vice President of Customer Experience at Holt Homes, “Guiding people to the right financial tools in partnership with our preferred lenders is often the difference in a buyer’s ability to purchase their dream home.”
Many people who have applied for financing on a purchase of a home or vehicle have heard the term “preferred lender.” In the new home industry, it refers to loan partners with expertise in the buying and building process who typically know the construction team and timelines. Another benefit to the buyer is the special programs preferred lenders can offer.
One of the financing solutions available through some preferred lenders is a program that can lock in an interest rate and protect the buyer from rising rates. Extended Rate Lock is a loan program offered by some preferred lenders such as US Bank that allows some buyers to “lock in” their rate for up to 12 months.
“So many homebuyers don’t know about rate protection options and it’s increasingly important right now. Bringing peace of mind to buyers throughout the construction process is a huge win,” says Jeff Bernhard US Bank Home Mortgage District Sales Manager.
Although there is an upfront fee for this service, some or all of the fee may be credited to the closing costs in many cases. The extended lock option can be seen as a deposit toward the final costs of the loan. Another rewarding feature of this program is called “float down.” Some lenders offer this onetime interest rate decrease so buyers can benefit if rates lower closer to closing.
According to Holt Homes there are other possible benefits to working with a preferred lender including quick pre-qualification and pre-approval; competitive interest rates; special financing; free phone consultations; consistent status updates; and more efficient communication throughout the financing process. Overall, this builder wants interested buyers to understand their options by offering solutions to the potential challenges of building a home in this current market.
Last year Holt Homes was busy meeting the demand for new homes, completing over 700 homes in communities as far south as Eugene, Oregon and as far north as Ridgefield, Washington. They say they anticipate continued availability with many opportunities for buyers wishing to pursue their dream of building a home.
Note: Not all lenders offer extended rate locking programs for the duration of the building process. It’s important to check with your builder and their preferred lenders for specific program terms.