Compare the same home and assumptions
Use the same purchase price, upgrades, down payment, loan type, term and lock period when comparing lender proposals. If an incentive depends on a lender, title company or closing deadline, identify that condition in writing.
Three incentives that work differently
| Feature | What it changes | Question to ask |
|---|---|---|
| Temporary buydown | Subsidizes early scheduled payments | What is the full payment after the subsidy ends? |
| Permanent discount points | Upfront cost in exchange for a lower rate | How long must I keep the loan to recover the cost? |
| Closing-cost credit | Funds eligible transaction expenses | Which charges qualify, and can any credit go unused? |
CFPB explains that points trade more cash upfront for a lower rate, while lender credits generally trade a higher rate for lower upfront costs. Compare written offers rather than assuming the largest advertised credit is best.
Budget for the completed property
- Use a completed-home tax estimate rather than a land-only bill.
- Identify whether CDD or other non-ad valorem assessments are already included in the tax estimate; count them once.
- Include homeowners and any separate flood coverage, HOA dues and mortgage insurance when applicable.
- Leave room for utilities, maintenance and moving costs outside the mortgage payment.
Questions to ask before signing
- What deposits are due, when are they due, and what do the contract’s refund terms say?
- When does the rate lock start, and who pays an extension if construction is delayed?
- What happens if the appraisal is below the contract price?
- Which completion documents and final inspections are required for the loan?
- When must income, assets and employment be updated?
Contract questions should be reviewed with the appropriate real estate or legal professional. Mortgage guidance does not replace that review.
A comparison that avoids a common mistake
Hypothetical example: one offer emphasizes a large credit, while another has lower fees but no credit. List actual eligible charges first, then subtract usable credits. Compare the resulting cash requirement and full payment. A credit that cannot be applied to an eligible charge may have no value to you.
Questions clients ask
Should I choose the lowest first-year payment?
Compare the payment for every stage of the loan, including after any temporary subsidy ends. The first year alone does not establish affordability.
Can an outside lender still be competitive?
Possibly. Compare the complete offer, including any incentive lost by choosing outside financing. The better result depends on the written terms.
Can I assume I will refinance when the buydown ends?
No. Future rates, value, credit and eligibility are uncertain. Evaluate the scheduled payment without relying on a future refinance.
Sources and editorial information
Published by The Rice Financial Group. Editorial update: October 14, 2026. How we prepare our resources.
Educational information, not an approval, rate quote or commitment to lend. Program rules, pricing and availability can change. Confirm the requirements for your borrower, property and transaction with the mortgage team.
Make the information personal.
Tell us what you are planning and where you need clarity. You do not need to be ready to apply to ask a question.
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