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Buying new construction in California.

Buying a brand-new home from a builder is exciting — everything is fresh and under warranty. But the process differs from buying a resale home, and there are smart questions to ask. This page explains buying new construction in California, in plain language.

A big one: should you use the builder’s preferred lender, or your own? Let’s walk through it.

A brand-new California home in a fresh development
Quick answer

When buying new construction, you usually sign a builder contract, put down an earnest money deposit, and pick finishes at a design center. Builders often offer incentives (like help with closing costs or a temporary buydown) if you use their preferred lender — but you can still compare with an outside lender. Because building takes time, an extended rate lock can help.

What this means

Buying new is different from buying a used home:

You may buy before it is built, choosing options along the way.
The builder sets much of the process and timeline.
Builders frequently offer incentives to use their lender.

The incentive can be real savings, but it is smart to compare the builder’s lender against an outside lender to see the true best deal. The incentive plus a fair loan is great; a weak loan with an incentive may not be.

Step by step

How it works

1
Get pre-approved. Know your budget before you sign. See Get Pre-Approved.
2
Sign the builder contract. With an earnest money deposit.
3
Choose finishes. At the builder’s design center (options add cost).
4
Lock your rate carefully. Building takes time, so an extended lock may help. See Rate Lock vs Float.
5
Compare lenders. Weigh the builder’s incentive against an outside loan.
6
Final walkthrough. Inspect the finished home and note any fixes.
7
Close. You sign, fund, and get the keys, with a builder warranty.

Should you use the builder’s lender?

ConsiderWhy it matters
The incentiveClosing-cost help or a buydown can be valuable
The rate and feesCompare against an outside lender
The total costAdd the incentive and the loan terms together
Service and timingA familiar lender may close smoothly

The bottom line: take the incentive seriously, but compare the full deal, not just the perk.

Requirements (at a glance)

ItemTypical new-construction note
Pre-approvalGet it before signing
Earnest moneyOften larger than on resale homes
Rate lockConsider an extended lock for long build times
InspectionDo a final walkthrough; you can still inspect
WarrantyNew homes usually come with a builder warranty

California-specific notes

Mello-Roos. Many newer California communities have Mello-Roos fees that add to your property taxes. Ask about them. See Taxes & Insurance.
HOA. New developments often have an HOA with dues and rules.
Property taxes. Expect the supplemental bill after closing, based on your purchase price.

Benefits

Everything is new. Fewer repairs early on.
Builder warranty. Coverage on the new home.
Customization. Choose finishes and options.
Builder incentives. Possible help with costs or a buydown. See Temporary Buydowns (2-1, 1-0).
Modern efficiency. Newer homes can be more energy-efficient.

Potential drawbacks (the honest part)

Options add up. Design-center upgrades raise the price.
Long timelines. Building can take months; protect your rate.
Incentives can steer you. Compare lenders to be sure it is a good deal.
Mello-Roos and HOA. Extra ongoing costs in many new communities.
Negotiation differs. Builders often hold firm on base price but offer incentives instead.
Real-world California examples

What it looks like in practice

Builder incentive in the Inland Empire
Builder incentive in the Inland Empire

Maria uses the builder’s preferred lender to get closing-cost help, but first compares it with an outside lender to confirm it is the better total deal.

Extended rate lock in Sacramento
Extended rate lock in Sacramento

Marcus’s home will take months to build, so he uses an extended rate lock to protect against rising rates. See Rate Lock vs Float.

Mello-Roos surprise in a new development
Mello-Roos surprise in a new development

The Lee family asks about Mello-Roos and learns it adds to their property taxes, so they budget for it before signing. See Taxes & Insurance.

Examples are for learning only. Your terms depend on the builder, lender, and community.

Common mistakes

1Using the builder’s lender without comparing. Always check the full deal.
2Forgetting Mello-Roos and HOA. They add ongoing costs.
3Underestimating upgrade costs. Design-center options add up fast.
4Ignoring the rate-lock timeline. Long builds need protection.
5Skipping the final walkthrough. Inspect before closing.
6Assuming new means perfect. Note any issues for the builder to fix.
Good questions

Frequently asked questions

Yes. You may buy before it is built, choose finishes, and follow the builder’s process and timeline.

Next steps

Buying new can be wonderful — just compare the builder’s lender against your own.

And budget for Mello-Roos and HOA costs. EZ Online Mortgage can compete with the builder’s lender so you can see the true best deal on your new home.

Get Pre-Approved (818) 305-6704
Keep learning

This page is for education only. It is not a loan offer or a promise of approval, rates, or terms. Qualification depends on your individual circumstances. Equal Housing Opportunity · NMLS #362311 · CA DRE #01871814.

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