Separate temporary from permanent rate changes
A temporary buydown uses a subsidy for part of the scheduled payment for an initial period; the underlying note rate still governs the permanent obligation. Permanent discount points cost money upfront for a lower rate, but the break-even depends on loan size, closing costs and when the home is sold or refinanced.
- Request the note rate and actual payment schedule
- Check qualification at the applicable rate
- Calculate the ownership horizon, not just first-year savings
Check restrictions on credits
Builder financing incentives may be tied to a particular lender or title company, specific dates or select inventory. Credits generally cannot be applied indiscriminately to every charge or treated as cashback. An outside lender may price the same transaction differently.
- Get eligibility and expiration in writing
- Compare matched loan terms and lock windows
- Do not confuse seller credits with a purchase-price reduction
Model the total cost, not the ad
A temporary low payment may help initially, but compare the complete cash-to-close amount, closing disclosures, amortization and what happens after promotional payments end. If the buyer plans to refinance, that future refinance is not guaranteed.
- Compare five-year loan balance and interest
- Keep insurance and taxes consistent between offers
- Ask what happens if construction delays closing
Compare the upfront pieces
Enter promotional credits you believe would be usable under each written offer. This comparison does not calculate financing costs or assume upgrades equal cash.
These are simple comparison figures, NOT actual purchase prices or cash-to-close quotes. Rate, discount points, APR, temporary buydowns, lock duration, title fees and credit restrictions could reverse the apparent advantage. Incentives cannot automatically be applied against every expense.
Official information
Terms, loan rules, funding and eligibility can change. These references are for education; always confirm the current written terms with the appropriate agency and lender.
CFPB: compare loan offers ↗