Investing in homeownership is a major financial endeavor that requires major planning and saving – from your down payment to closing costs, almost every step of the way involves spending. Fortunately, the many benefits of owning a home make the financial sacrifices of saving for it worthwhile.
Smart home shopping can help you achieve your goal of becoming a homeowner. Buying a brand new home may seem unattainable as a first-time homebuyer, but affordable new homes in your housing market, cost saving features built into new construction, and builder incentives make buying a new build a wise choice for savvy shoppers.
Builder incentives can save you tens of thousands of dollars on the initial cost of your home, and over the lifetime of your mortgage. Taking the time to compare the actual cost of a new construction home can prove that it is far more affordable than a used house.
Here are some common homebuilder incentives that can reduce the price of a new home. As you explore the housing options, ask builders about what incentives they offer that can help save you money.
Special Finance Teams and Preferred Lenders
One of the biggest financial advantages homebuilders can offer home shoppers is an in-house finance group or a preferred lender. With special mortgage teams, home shoppers can sometimes secure mortgages with lower down payments or with lower interest rates than other lenders can offer.
Special finance teams that specialize in helping home shoppers finance new construction homes also make the entire home financing process less stressful. For instance, HHHunt Homes’ finance partners walk home shoppers through the ins and outs of buying a new construction home. They can help clear up any confusion or uncertainties surrounding the monetary side of your new home journey.
Special finance teams that offer mortgages with lower down payment requirements can save home shoppers thousands of dollars on the initial cost of their home.
If you have already saved for a down payment, you’re in great shape! You can now put those funds toward:
- Your personal savings
- Luxury upgrades on your new home
- Other financial goals, such as a college fund or family vacation
If you’re still saving up for your down payment, a financing team that can offer a lower down payment requirement can help get you the keys to your new home sooner.
Another major savings opportunity from builder finance teams can be special mortgage rates. For example, Beazer Homes has a special mortgage program called Mortgage Choice, which gives home shoppers all the benefits of shopping around for a lender in one convenient place. This ensures their home buyers have a low rate without the stress of interviewing a number of banks and lenders.
Securing a low rate mortgage can save homeowners tens of thousands of dollars over the lifetime of their mortgage. Using an in-house financing team can also lock in your mortgage rate, ensuring that your mortgage payments won’t go up if federal interest rates climb. For instance, with Drees Homes’ locked-in mortgage rate, lovingly called the DreesFreez, you can lock in a mortgage rate for up to 270 days while you build your home.
The savings from a lower-interest mortgage can allow you to:
- Pad your personal savings
- Pay off your mortgage sooner
- Focus on paying off other debts
- Improve your lifestyle
As you explore the homebuilders in your area, ask your builder representative about what special financing options they have available to potential homebuyers, and how that can help you save money on your new home.
Covering or Discounting Closing Costs
Another hurdle along your journey to homeownership is closing costs. Closing costs can add thousands of dollars to the cost of your new home, just when you think you’re at the end of the process.
However, buying a new build home can save you money every step of your homebuying journey, even right at the end. One of the most appealing incentives homebuilders offer potential homebuyers is reducing or covering closing costs. This perk saves homeowners thousands of dollars on the final cost of their home, and saves you the stress of wrangling all the pieces of the closing process.
As you search for the right builder to make your dream home a reality, ask about any incentives that reduce or eliminate the financial burdens of closing costs.
Free or Discounted Upgrades
Another way home shoppers can move into their dream home, while still saving money, is to explore builder incentives surrounding upgrades. Builders frequently offer incentive packages that comp thousands to tens of thousands of dollars worth of upgraded home features.
Free or reduced cost upgrade incentives can help you move into your dream home. If you already know what upgrades are non negotiable in your newbuild home, this can reduce the cost of your home. If you have a fixed budget, this builder incentive can help you get a nicer house than you expected.
As you work with local builders to determine the right builder for your new home project ask about incentives related to new home upgrades like:
- How much can you offer for allowances for upgrades?
- Can you offer reduced costs for certain upgrades?
- If we close in a certain amount of time, can you offer comped upgrades?
- What upgrades can you add to my home at no increased price to my mortgage?
- If I use your preferred lender, can I get comped upgrades?
- Do certain communities get better comped upgrade packages?
As you shop for your new home, think about ways that your homebuilder can help you save money. Your builder can help you lower the overall cost of your home and your mortgage – all you have to do is ask.
After graduating in 2016 from The University of Texas with a degree in English, Sanda Brown became a content writer for the BDX with a focus on website copy and content marketing.
At the BDX, Sanda helps write and edit articles on NewHomeSource.com, writes website copy for builders, and manages a team of freelancers that work on additional content needs.
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