You finally found the home of your dreams, but there’s just one problem: it’s just out of your price range.
Don’t despair, you might have some options that can help bridge the gap between your dream home and your financial reality. The key is to take a strategic approach, and explore every option you have available.
1. Consider Builder Incentives
Builders frequently offer financial perks designed to attract buyers without lowering the home's price tag, a practice they try to avoid so as to maintain market stability.
“We’re seeing a lot of builders, including us [DeNova Homes], offer financial incentives to make homeownership more accessible,” said Austin Parlett, Sales and Marketing Coordinator for DeNova Homes. “These often include interest rate buy-downs, help with closing costs, and even promotional pricing.”
2. Explore Interest Rate Buy-Downs
Interest rate buy-downs might be one of your best options. They involve builders or lenders temporarily reducing your interest rate, lowering your monthly payments for a set amount of time, or potentially even the full term of the loan.
"An interest rate buy-down allows the buyer, or builder, to pay upfront to reduce the mortgage interest rate for a certain period, or even permanently," Parlett said. "This means lower monthly payments, which can make a big difference in both affordability and peace of mind, especially in the early years of homeownership."
3. Look Into Down Payment Assistance
Many buyers are unaware of the wide range of down payment assistance programs available. Federal, state, and local initiatives offer financial assistance through grants, loans, or tax credits designed to support buyers just like you. Depending on the builder, they may even help you navigate these opportunities and figure out what programs are the right fit for your situation.
“The Landsea Mortgage team works with each homebuyer to determine the loan that best fits their specific needs and then suggests the most appropriate lending option,” said Michelle Byrge, Corporate Vice President of Sales and Marketing for Landsea Homes.
4. Evaluate Different Mortgage Options
Mortgage type matters, and they can make a big difference in affordability. An adjustable-rate mortgage (ARM) typically starts with lower rates compared to fixed-rate loans. There's a future risk if interest rates rise, but ARMs offer immediate affordability, especially if you anticipate a salary increase or improved financial stability later on.
"We have positioned ourselves with Landsea Mortgage to lock in a long-term rate for our homeowners to simplify the guessing game we are seeing with interest rates," Byrge said. "Our Extended Rate Lock Program allows buyers to lock in their interest rate before the ink dries on the contract, making what may seem unpredictable, predictable."
5. Negotiate Strategically: Request Upgrades Over Discounts
Direct price reductions can be tough negotiations since builders often worry about setting a precedent for future sales. However, they are usually much more flexible with upgrades and premium features.
“While we do not typically negotiate pricing, we do offer option incentives that help buyers put those funds toward upgrades," Parlett said. "This gives buyers the flexibility to personalize their home with design features that matter most to them, like upgraded flooring, countertops, or appliances, all while staying within their overall budget.”
6. Prioritize Wisely
Take a moment to clearly outline your home priorities. What exactly makes this home your dream home? Could a slightly smaller footprint or fewer premium upgrades bring the cost back into your comfort zone without sacrificing your core desires?
Being realistic and flexible about what you truly need versus what would simply be nice to have can shift the numbers in your favor significantly.
Be Prepared to Walk Away
The most important mindset you can have in this process is to be willing to walk away. Emotional attachments can make it hard to let go, but houses regularly enter and leave the market. If negotiations stall or the financial pressure feels too intense, step back.
Ultimately, your long-term financial comfort is far more important than any single property. And remember, another perfect home is always just around the corner.
Stay Positive and Persistent
Navigating the fine line between aspiration and affordability is tricky but not impossible. Stay open-minded, negotiate strategically, and keep your priorities front and center.
At the end of your homebuying journey, feeling comfortable and confident with your financial decisions matters most. With a strategic approach, patience, and a little creativity, you’ll find a way to make your dream home a financially comfortable reality.
Michael Letendre
Michael Letendre is a writer for NewHomeSource and Builder Magazine.