Sign a quitclaim deed to contractor

[Jay Ray]

We are getting ready to build a house. We had pre-approval from our own bank but the contractor said it will be easier and low rate to go with a certain mortgage company. We got pre approval from that company and signed the contract for new construction with the builder. Now, the contractor wants us to sign the quitclaim deed of our land to him, so he can get construction loan financed.  Why does he need a construction loan based on our lot as a collateral when we are pre-approved. We are seeing red flags. We signed the contract a month ago, and now after exactly a month, he mentioned the quitclaim deed issue, never before. We don't want to sign our lot over, is there anyway to get out of the contract now?? Please help, Thanks.