Builder giving you $20,000 in incentives? Verify the math first.
DR Horton, Lennar, and K. Hovnanian have affiliated mortgage and title companies. Their incentives are sometimes genuine savings — and sometimes taken back through fees, points, and interest rates. Here’s how to tell which one you’re looking at.
“The builder gave me $15,000 in incentives, but I think I paid it back through the mortgage, title, or fees.”
The builder, the mortgage, the title — often one family.
Large national builders don’t just build homes — they operate affiliated mortgage lenders and title companies. When they offer you an incentive to use their lender, that incentive moves money within the same corporate family.
This doesn’t make the deal bad. It does mean the math deserves a careful look — because the incentive and the costs come from the same pocket.
| Builder | Mortgage | Title |
|---|---|---|
| D.R. Horton | DHI Mortgage Affiliated |
DHI Title Affiliated |
| Lennar | Lennar Mortgage Affiliated |
Lennar Title Affiliated |
| K. Hovnanian | K. Hov. American Mortgage Affiliated |
Affiliated title providers |
RESPA requires disclosure that these companies are affiliated and you are free to choose any lender or title company. That disclosure is easy to miss in a stack of builder paperwork.
Four patterns that come up again and again
“The incentive wasn’t really free”
«Бонус на самом деле не был бесплатным»
„Zachęta nie była naprawdę darmowa”
Buyers receive a $15,000–$20,000 closing credit, then discover higher origination fees, additional points, or a rate that’s 0.25–0.5% above what a local broker quoted. The incentive often offsets what it appears to save.
Expensive title fees
Завышенные сборы за титул
Zawyżone opłaty tytułowe
Most buyers never compare title companies — especially first-timers. Builder-affiliated title companies are not automatically the cheapest option.
Mortgage points hidden in the worksheet
Ипотечные пункты, скрытые в таблице
Punkty hipoteczne ukryte w arkuszu
Builders advertise a compelling rate — say 4.99%. But the Loan Estimate may include 2+ discount points to achieve that rate. The rate is real, but the cost to get there can significantly erode the incentive.
Property tax shock after reassessment
Шок от налога на имущество после переоценки
Szok podatkowy po przeliczeniu wartości
New construction taxes are often estimated using land value only. After the home is assessed at full completed value — typically year 2 or 3 — payments can jump significantly.
Builder lender vs. outside lender — over 5 years
Don’t compare monthly payments. Compare total 5-year cost including all fees, points, and credits.
Builder Lender Numbers
5-Year Total Cost Comparison
Numbers too close to call? Send me your actual Loan Estimates and I’ll review them with you — free.
Get a Free Loan Estimate ReviewSometimes the builder deal is genuinely excellent.
Builders can subsidize financing in ways a bank simply can’t. The answer is never “always” or “never” — it’s verify the math.
✓ Builder lender is likely worth it when:
- The APR on their Loan Estimate is at or below market
- Points are zero or minimal
- Title fees are competitive with independent quotes
- Builder is subsidizing a below-market rate buydown
✗ Be skeptical when:
- Advertised rate has 2+ points attached
- Origination fees are $3,000+ higher than competitors
- Title & settlement fees exceed local independent quotes
- Estimated taxes seem unusually low
The three-step verification I walk every buyer through
Get three Loan Estimates
Получите три Оценки займа
Uzyskaj trzy Szacunki kredytu
Builder lender, a local independent mortgage broker, and a local credit union. All three on the same loan amount and same day if possible.
Compare APR — not rate
Сравнивайте APR, а не ставку
Porównuj APR — nie oprocentowanie
APR includes fees and points. A 5.5% rate with 2 points may cost more over 5 years than a 5.875% rate with zero points.
Get a post-assessment tax estimate from the municipality
Получите оценку налога после переоценки в муниципалитете
Uzyskaj szacunek podatku po przeliczeniu z gminy
Call the tax assessor’s office in the town where the home is located. Ask what the mill rate is and how new construction is typically assessed.
Send me your builder’s Loan Estimate. I’ll tell you if the math works.
Free for any NJ buyer. I’ll review your mortgage costs, title fees, tax estimate, and builder incentives — and tell you plainly whether the deal is worth it.
Tip: attach your Loan Estimate PDF to the email that opens after you click below.
- Mortgage & origination fees
- Title & settlement costs
- Builder incentives & credits
- Tax estimate review
- Hidden closing cost check
No obligation. No spam. Eugene responds within one business day.
Eugene Jaworski
REALTOR® · Realmart Realty, Millburn NJ · Buyer’s advocate for new construction purchases