Using builder's finance company to close the loan

Using builder's finance company to close the loan

Littleton, CO · Member since 2017 · 5 posts · 1 vote

I'm in the process of purchasing a new investment home from a known builder. Initially for prequalification they asked for lot of documentation, which I provided and approved. I was told that, it is part of their process to make sure the buyer is qualified. I understand that part, they want to have some surety.  That is fine.

Their finance guy is kind of forcing us to use their home finance rushing us to sign the papers, which we are refusing. I have my preferred lender who closes in time and better rates. I am in this field for more than 10 years, know well about home purchasing and done more than 20 purchase loans/refi's, but this new to me. Never been forced to use their lender. I don't want to pay their exorbitant fees and costs. 

Is that even legal? Anyone faced similar issue?. Any pointers to applicable laws are appreciated.

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  • Nathan GesnerBusiness Member
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    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    5y

    No, it's not legal. In fact, it's generally considered unethical to force someone buying product A to also purchase product B. As a REALTOR it's a violation of our Code of Ethics and could cost us our license.

    I don't think it's common for a builder to require financials up front. All they really need is proof of funding, which you could have provided with a letter from your lender. These guys collected your financials so they could try to force you into a loan with them.

    Don't sign anything and be firm with them.

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  • Littleton, CO · Member since 2017 · 5 posts · 1 vote
    5y
    Originally posted by @Nathan Gesner:

    No, it's not legal. In fact, it's generally considered unethical to force someone buying product A to also purchase product B. As a REALTOR it's a violation of our Code of Ethics and could cost us our license.

    I don't think it's common for a builder to require financials up front. All they really need is proof of funding, which you could have provided with a letter from your lender. These guys collected your financials so they could try to force you into a loan with them.

    Don't sign anything and be firm with them.

     Thank you very much Nathan. Sorry for the late response.

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