First time home buyer incentives are 'deal sweeteners' offered by builders or programs sponsored by governments to assist with the purchase of a new home. In the case of government sponsored programs, the usual format is confined to down payment assistance, once off grants, purchase cost offsets or low cost financing. Builder provided packages can include any number of creative incentives ranging from feature upgrades or financial incentives. Before you buy your new home it's important to investigate what options are available from both sources. If you qualify, one or both programs can save you a considerable amount of money.
The abundance of home builders has created a competitive market place for companies who are eager to win consumer business. First time home buyer incentives offered by building companies include: kitchen upgrades, rent subsidization, no money down purchase plans, feature upgrades and builder supplied financing. Some of the deals offered can be very enticing. It's important to do due diligence, however, to ascertain that the value of the "deal sweetener" on offer is not compensated for by over inflating the purchase price of the home. This form of offsetting does go on and it's important to remember that, as a consumer, you have bargaining power when it comes to negotiation.
Builder supplied incentives for first time homebuyers is often part of the incentive program. When sourcing your financing options you need to consider the life time cost of the mortgage repayments. Easy access to credit through a builder can sometimes be costly. In some case studies, investigation have uncovered that builder supplied finance can have built in interest rates that are considerably above current market rates. This results in monthly repayments that are more expensive than standard market rates. Furthermore, the finance component of the contract may include penalties for purchasers who try to refinance after a certain period of time. It is therefore imperative that you read the fine print because overlooking one important detail can be very costly long term.
Government first time home buyer incentives are available for applicants that meet the qualifying criteria. These programs are offered at both the federal, state and local level. The type of programs on offer depends on the entry conditions required by the supplying authority. The US Department of Housing and Urban Development has a number of low income home buying programs that can be perused on their website. Similar programs are available in other states and countries. To determine if one applies to you, doing some online research will uncover the relevant government authority in your area. You can then investigate your options and determine whether you qualify.