Shop it either way, and let the Loan Estimates decide. A large builder incentive is genuinely worth something, and its size changes the answer: - Small credit (say $2,500 to $3,000): an outside lender can often beat the builder lender's total cost even after you subtract the incentive. - Big credit (on the order of $20,000): much harder for an outside lender to overcome, so the builder's lender may well be your best deal. You can't know which situation you're in without a comparison. Get at least one competing Loan Estimate from an independent lender and lay it next to the builder lender's. Sometimes the builder's lender is marking up the rate by a few thousand dollars to fund a much larger credit, which is a good trade for you. Other times the underlying terms are poor and the credit is papering over a bad rate. The estimates make that visible. One longer-term consideration: a builder-affiliated lender has little incentive to help you refinance down the road, while an independent relationship can keep paying off if rates ever move in your favor and refinancing makes sense. Nobody can promise where rates go, but a lender who'll be there for the next loan has value. Compare the numbers, weigh the relationship, then decide.