My builder offers a 6000 dollar builder bonus which can be used towards closing cost or upgrades.?

Question

Well I added tile floors in kitchen/dining/laundry and both bathrooms, stainless steel appliances and finished the bonus room which totaled about 12,900. My lender estimated that my closing cost to be about 5600 dollars so my question is will the 6000 just be subtracted off the price of the house which totaled 165,900 or will they just pay my closing and i have no out of pocket expenses. How does it really work.

Answer 1

That's great, but what is your question? If it is whether you should use it for either of these options that is entirely your choice. Upgrades are not inexpensive and the standards the builder offers are usually not all that great. With most builders, $6000 can buy you some nice upgrades with the exception of structural changes. They are much more costly. We just completed our design and structural decisions earlier this year for our new build to be completed in August, but this is the third home we have built.

Answer 2

cost is determined at the end in the contract by the apr. If calculating by the rule of 78 there is no bargain. Ask what the simple percentage rate is over the term. if u pay less interest by paying sooner go for it. 78 method charges same interest even if paid off sooner. no matter what the money is used for.