What's the difference between going through a broker and getting a loan through my builder?

We are building a new home with a national builder. The home will not be completed for 9-11 months. I am familiar with mortgages and refi's, but not with these situations with builders and lengthy contracts.The builder has a loan program where we can pay 1/2 point to lock our rate for 365 days at 1/2% above current rate. The fee is payable at closing. If we do not do the loan with the builder's lender, we have to pay a 1% penalty (this is because the 365 day lock fee is actually 1%, but the builder is absorbing half of it. The builder fronts the entire lock fee, and basically gets refunded 1/2 from us at closing).We have one free opportunity to float the rate down within 60 days of closing the loan. So, if rate are less than our lock, we still can reduce the rate.The maximum we would mortgage is $300K and likely closer to $250K, so the cost of this seems reasonable as compared to the risk of rates increasing over the next 12 months. So this sounds like a very good deal to me. The other closing costs with the builder lender seem reasonable. (I've checked with brokers, and the only difference I can see is that with them, we pay the entire 1% lock fee, upfront.)Any and all advice is appreciated - I didn't even know these programs existed so it's all new territory for me. by abbyjo_408_732 from Harrington, Delaware. Apr 4th 2012 Reply