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Financing a New Build in McKinney: What's Different and What to Expect

Purchasing a new construction home in McKinney, TX, is an exciting venture, but it comes with its own set of financial intricacies. Unlike buying a resale home, financing a new build has some unique aspects that potential homeowners should be aware of. This guide will walk you through the differences and what to anticipate when securing financing for your brand-new home.

1. Construction Loans vs. Traditional Mortgages

Construction Loans:

  • These are short-term loans used to cover the costs of building your home.

  • Typically, you'll only pay interest during the construction phase.

  • Once construction is complete, the loan can be converted into a traditional mortgage or paid off with a new mortgage.

Traditional Mortgages:

  • These are used for buying existing homes or refinancing.

  • You start repaying the principal and interest immediately after closing.

2. Builder Financing

Many builders in McKinney offer their own financing options. While this can be convenient, it's essential to:

  • Compare Rates: Ensure the builder's financing terms are competitive with other lenders.

  • Understand Incentives: Sometimes, builders offer incentives for using their preferred lender, such as upgrades or closing cost assistance.

3. Larger Down Payments

New constructions often require a more substantial down payment than resale homes. This gives the builder some assurance, especially if you decide to back out or if there are unforeseen complications.

4. Locking in Your Rate

With the time gap between starting the construction and moving in, interest rates can fluctuate. Some lenders offer an extended rate lock, ensuring you secure a particular rate for the duration of the build.

5. Contingency Funds

It's wise to set aside additional funds when building a new home. Unexpected costs can arise, from upgrades to unforeseen construction challenges.

6. End-of-Build Appraisal

Once the home is complete, an appraiser will determine if the home's value matches the amount of the loan. If the appraisal comes in lower than expected, you might need to adjust your financing or negotiate with the builder.

7. Final Walkthrough and Closing

Before closing, you'll do a final walkthrough with the builder. Ensure everything is as per the agreement and that all fixtures and finishes are correctly installed. After this, you'll proceed to the closing process, where you'll finalize your mortgage and take ownership of the home.


Financing a new build in McKinney requires careful planning and a clear understanding of the differences from purchasing a resale home. By being well-informed and working closely with your lender and builder, you can navigate the process smoothly and step into your dream home with confidence. Please call us at 469-269-6541 for more details about McKinney and available homes!

Homes For Sale in McKinney, TX

Pulte Homes For Sale in Highland Lakes in McKinney, TX


About us: McKinney New Construction Expert Real Estate Agent

As a Top Real Estate Professional in McKinney, I understand the challenges that arise when buying a new construction home. There are over 100 builders in the DFW area. I work with most of the new home builders in McKinney and understand how various builders operate. I am familiar with the options they offer, current incentives and I frequently visit the upcoming communities they are building. I guide my clients through all steps of the new home construction process and aggressively protect their interests in the transaction.

As a holder of top real estate industry certifications and designations like CRS, ABR & GRI, I can offer my clients experience as a Buyer's Agent and REALTOR®, top Industry Customer Service, in-depth, up-to-the-minute and comprehensive market knowledge; honesty, integrity, dedication, and professionalism in my business.

Whether you are a first time buyer in McKinney looking to buy a home in Highland Lakes or whether you are relocating to McKinney from California or moving your entire family from areas like San Francisco, Fremont, Palo Alto, Los Angeles, San Diego in California due to job transfer with your company, I can help you find a new construction home in Highland Lakes in McKinney. Our relocation team eases the transition - whether you are moving across town or across the globe. We will work with you to find an area that best suits your professional, family and lifestyle needs. We have all the tools you need to help your home search. Whether it is video previews of homes, extended work hours, digital signatures for documents or more, we can make this process as comfortable as possible no matter where you are located.

What is most important to you in your new construction home in Highland Lakes in McKinney? Send us an email at info@NitinGuptaDFW.com or give us a call at (469) 269-6541 to schedule a no obligation consultation. We’ll give you honest advice about Highland Lakes community that you can use to help make your home buying decision.



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