If you’re looking to finance a home, you may come across the term “preferred lender requirement.” Here’s what that means: A preferred lender requirement is when a seller or builder requires buyers to use a specific lender to purchase a home. In some cases, the buyer may still be able to choose their own lender, but they may have to pay a higher interest rate. If you’re considering a home with a preferred lender requirement, be sure to compare rates and terms from the required lender with other lenders to make sure you’re getting the best deal possible.

When selling your home, many factors go into the process, and financing is a big one! If a seller wants to make sure the buyer works with a lender they trust to get the job done, the seller can write a contingency in the offer that requires the buyer to be pre-approved and/or work with the lender the seller has selected. Preferred lender requirements are put in place for a variety of reasons. Sometimes, the seller or builder has a financial relationship with the required lender, such as receiving kickbacks or discounts. In other cases, the preferred lender may have more experience working with the seller or builder and may be able to close the loan more quickly.

Whatever the reason or whether you are a buyer or a seller, it’s important to understand all the implications of a preferred lender requirement before signing on the dotted line.

Do you have any questions about preferred lender requirements? Your Berkshire Hathaway HomeServices Florida Properties Group forever agent can help guide you to see if this is the best fit for YOU!