Builder Incentives & New Construction Offers

Many new construction communities advertise special incentives – closing cost credits, rate buydowns, free options or “preferred lender” bonuses. This page explains what those really mean so you can compare them with resale homes and other loan options.

Common Types of Builder Incentives

• Closing cost contributions (for example, “up to $10,000 toward closing costs”)
• Temporary or permanent interest rate buydowns
• Design center credits or free upgrades
• Help with prepaid items such as taxes and insurance

Things to Watch Carefully

• Whether you must use the builder’s preferred lender to receive incentives
• How the incentive affects your final interest rate and APR
• Whether the home price was increased to “include” the incentive
• Deadlines, expiration dates and limits in the fine print

How I Can Help

As both a REALTOR® and Mortgage Loan Originator, I can help you compare the builder’s offer with independent loan options and available assistance programs so you can see the full picture.

• Estimate your budget with Rent vs Buy
• Check your current DTI before visiting models
• Request a written comparison including builder incentives