New Home Incentives – Las Vegas New Homes

Las Vegas New Homes – Getting the Most from the Builder Incentives

Now that we are once again experiencing a “balanced” market, many new home builders are offering great incentive packages for buyers on standing inventory and homes that are due to be completed shortly. The problem is, to get the incentive you have to use the builder’s “preferred” lender. Unfortunately in most cases the “preferred” lender may not have the best loan program or lowest rates to suit your needs.

Now that the buying frenzy of 2004 and 2005 has returned to more rational levels, builders nationwide are currently offering incentive packages that may vary widely - from as little as $1,000 towards closing costs, to $10,000 in upgrade options, or all the way up to as much as $75,000 off the sales price. So for the first time in over two years it is a great time to strike a deal on a new home for both investors and primary home owners. But the deal often comes with a string attached – you must use the builder’s lender, and you will probably find that you could easily do better going to another lender with lower interest rates and terms. Over the long term, higher interest rates and closing costs can negate much of any incentive received.

But for those that are savvy, there is still a way to take advantage of the builder incentives being offered without sacrificing on interest rate and closing costs.

Since you must use the builder’s lender to get the incentive, find out what the interest rate would be for a “no cost” loan - that is a loan where the interest rate is high enough that the builder’s lender can cover the closing costs entirely with no out of pocket expense to you. This type of loan will typically range from 1% to 2% higher than the going rate. Make sure that the loan being offered has no pre-payment penalty. Then negotiate with the builder to give you the loan costs you would have been paying as either a reduction in sales price or as option money towards upgrades.

As you are qualifying with the builder’s lender, also find an outside lender that can give you the best rate and terms on a refinance and qualify with them at the same time to make sure this approach will work for you. You will be using the money you have saved on the negotiated reduced sales price or upgrade options to pay for the refinance. Then as soon as you have closed on the home with the builder’s lender, consummate the refinance within a few days or weeks with your new lender.

Now is the ideal time to take advantage of these new home sales incentives, as many sources think that the next two years are merely the lull before the real baby boomer storm that is due to hit in 2008, especially in prime retirement areas like Las Vegas, Texas and Florida. Currently there is a groundswell towards proposed legislation aimed at restricting or eliminating the practice of tying builder incentives to “preferred” lenders. However it will take years for consumers to see the results of these changes, and at that point many of the incentives may have disappeared. For help with refinancing options during your new home purchase, please call us at 702-985-7654 or email us at sold@greatlasvegashomes.com .