Finance thru the Builder?

My best friend called me the other day.
He was thinking of buying a bigger home.
The builder told him to use their mortgage company and "reap all the benefits".
I've combatted this over and over again.
Sometimes the deals sound too good to be true.

Here's an article from the WSJ:


Thinking of buying a new home in this softer market? Chances are your builder is going to try to sell you a mortgage.

Builders have long encouraged their customers to use their mortgage affiliate for financing, and not just to make a little extra money. It also gives them control of the transaction, making it less likely that a mortgage snafu will create problems at closing. Now, as sales slow and cancellations rise, builders are increasingly rolling out special deals that may be tied to using their affiliated lender.

But you may well be able to find a better deal on your own. Builders' mortgage offers "clearly are worse in all the cases I've seen," says Jack Guttentag, professor emeritus at the University of Pennsylvania's Wharton School and founder of the mortgage-advice Web site www.mtgprofessor.com.

Not only be careful - be excellent to each other, eh?