Financing a New Construction Home in Scottsdale

Scottsdale and the greater Phoenix area continue to see significant new construction activity, with builders offering communities ranging from entry-level homes to luxury estates. Financing a new construction home works a bit differently than buying a resale property — and understanding your options before you walk into a builder’s sales office can save you thousands of dollars.

Builder Financing vs. Outside Lender

Most builders have preferred or captive lenders — in-house mortgage companies that offer incentives (closing cost credits, appliance packages, rate buydowns) to use their financing.

Here’s what buyers often don’t realize: builder financing isn’t always the best deal, even with the incentives. Builder lenders may have higher base rates, limited loan programs, or less flexibility on complex scenarios.

Mark Merry recommends getting a pre-approval from an independent lender before visiting builder sales offices — so you have a comparison point and negotiating leverage. In many cases, builder incentives can be used to buy down your rate rather than toward upgrades you don’t need.

Types of New Construction Financing

There are two main scenarios for new construction financing:

Spec or quick move-in homes: The builder has already constructed or nearly completed the home. These are financed with a standard purchase mortgage — conventional, FHA, VA, or jumbo — just like a resale. Closing happens when construction is complete.

To-be-built or custom construction: The home is built to your specifications on a timeline. These typically use a construction-to-permanent loan (also called a one-time close loan), which covers both the construction phase and converts to your permanent mortgage at completion — saving you from going through two closings.

One-Time Close Construction Loans

A one-time close construction loan (also called a construction-to-permanent loan) is the most efficient way to finance a custom or semi-custom build in Scottsdale:

• One application, one closing, one set of closing costs

• Locks your interest rate before construction begins — protecting you from rate increases during the build

• Converts automatically to your permanent mortgage when construction is complete

• Available in FHA, VA, and conventional versions

• Construction draws are managed by the lender and released as construction milestones are met

New Construction Tips for Scottsdale Buyers

A few things to know before you buy new construction in Scottsdale:

• Builder contracts favor the builder — review carefully before signing

• Get an independent home inspection even on new construction

• Understand the timeline — construction delays are common and can affect rate lock expiration

• HOA fees in new communities can be significant — factor them into your budget

• Upgrades at the design center add to your purchase price and your loan amount

Work With an Independent New Construction Lender

Mark Merry has helped hundreds of buyers finance new construction homes throughout Scottsdale and the Phoenix metro. He works independently — no ties to any builder — and will give you an honest assessment of your options before you sign anything.

Call (480) 442-7487 before you visit that sales office.