I'm buying a tract type home in a sub developed exclusively by one
builder in FL. The builder is encouraging me to use their lender,
which is a Wells Fargo Affiliate.

Their good faith estimate of closing costs is about 2.5% of the home's
value, and their rates seem reasonable. They are also willing to put
a 1 year lock on an adjustable rate mortgage while my home is
completed. I already have a credit approval through this company.
The builder isn't offering me any concessions if I use their lender,
aside from requiring only a 5% deposit up front rather than 10%. The
only thing that irks me is that they have a fairly high application
fee -- $365. If I give them this now, it will result in "escalation
of commitment" on my part, and there's no way to recover it if their
rates actually become less reasonable after I've "applied". I'm also
finding that other lenders don't really want to give me details on
closing costs, etc., until I apply for a mortgage with them, so it's
hard to compare offers. A lot of them tell me not to use the
builder's lender because my house will be over-appraised, no one will
represent me, etc. I think this is just sales hooey. The builder's
lender has just as much interest in acurately appraising my house as
any other lender.

What should I do -- just go with the builder's lender, or maybe apply
for a couple of low app fee mortgages and see if I can find a better
deal?

Thanks!

Char