Is your west Cary build on the horizon while rates keep moving? You’re not alone. New construction adds timing and financing twists that resale buyers never see, and builder incentives can be hard to compare. In this guide, you’ll learn how rate locks work, what timelines to expect, and how to value upgrades and credits so you can choose with confidence. Let’s dive in.
Loan options for Cary new builds
Choosing the right financing starts with how your loan is structured during construction. Each path changes how and when your rate is set.
Single‑close construction‑to‑permanent
With a one‑time close, you apply and close once. The lender funds construction in draws and your loan converts to a permanent mortgage at completion. You pay one set of closing costs and go through underwriting once. Ask when your permanent rate is locked and what lock fees apply. Expect tighter underwriting and potential reserve requirements.
Two‑close construction‑only
You take an interest‑only construction loan, then apply for a separate permanent loan at completion. This lets you shop later, but you’ll pay closing costs twice. You also carry rate risk between closings, so plan for volatility and explore extended lock products if available.
FHA, VA, and conforming programs
Fannie Mae, Freddie Mac, FHA, and VA have construction or conversion programs with specific eligibility and documentation rules. FHA and VA also allow single‑close options if you qualify. Confirm current guidelines and documentation needs with a local lender that regularly finances new builds in Wake County.
How rate locks really work
Your lock strategy should match your construction timeline and the risk you’re comfortable carrying.
Core lock choices
- Float: You don’t lock. Your rate moves with the market.
- Standard lock: Secures a rate for a short period, often 30–60 days. Good for quick closings.
- Extended lock: Protects your rate for 90–365+ days, usually with a fee or higher rate.
- Float‑down: Lets you reduce your rate once if the market drops before closing, often with conditions and fees.
- C‑to‑perm lock: For one‑time closes, the lender may lock the permanent rate at construction closing or at a set point during the build. Terms vary by lender.
- Builder‑sponsored buydowns: The builder pays to lower your rate temporarily, such as a 2‑1 or 1‑0 buydown.
Extended locks and float‑downs
If your west Cary home will take 4–9 months, an extended lock can be a safety net. Ask for pricing, expiration rules, and whether a float‑down is available. Clarify how delays are handled if your build runs past the lock date.
Buydowns vs. lender credits
Builder buydowns lower your monthly payment for a set period. Lender credits reduce your cash to close, but you might accept a higher long‑term rate. Decide whether short‑term relief or long‑term savings matters more for your budget.
Timeline for west Cary builds
Production and semi‑custom timelines can vary, and delays do happen. Use milestones to plan your lock, your move, and cash reserves.
Typical milestones
- Lot close or allocation: 0–4 weeks to finalize paperwork.
- Permitting: Production builders often start this in advance. Custom homes can take 4–12+ weeks depending on scope.
- Site work and foundation: 2–6 weeks.
- Framing: 2–6 weeks.
- Mechanicals and rough‑ins: 2–4 weeks with inspections.
- Insulation and drywall: 1–3 weeks.
- Interior finishes: 4–8 weeks.
- Final inspections, punch list, and CO: 1–4 weeks.
- Typical total: About 4–9 months for many production homes; custom builds often take longer.
Draws and interest during construction
Construction loans fund in draws tied to milestones like foundation, framing, and final. The lender or a third party inspects before each disbursement. Your payment during construction is usually interest‑only on the amount drawn. Expect draw requests, contractor invoices, and lien waivers as part of each release.
Delay risks to plan for
Delays increase carrying costs, including interest, rent, and insurance. They can also push you past your lock expiration. Build a buffer for extensions and verify appraisal timing. Some lenders order more than one appraisal.
Cary permitting and inspections
Inside Cary limits, Town of Cary Development Services handles permits and inspections. In unincorporated areas, Wake County does. Ask your builder which authority applies to your community and whether they already have pre‑approved plans.
Valuing incentives and upgrades
Incentives are common, especially when rates are high. Focus on the net impact, not the headline.
Common incentive types
- Price reductions or promotional pricing
- Closing cost assistance or lender credits
- Temporary or permanent rate buydowns
- Design center allowances or included upgrades
- Cash credits at closing
- Lot premium reductions or waived fees
- HOA initiation or first‑year dues paid
- Builder‑paid mortgage insurance or PMI concessions
- Incentives tied to preferred lender or title
Compare with a simple framework
- Convert to cash value: Treat a $5,000 closing credit as $5,000 cash at closing. For a 2‑1 buydown, total the interest savings in years 1–2 and compare to a lump‑sum credit.
- Separate short‑term from long‑term: A closing credit lowers cash due today. A permanent rate buydown or lower price helps every month.
- Check tradeoffs: A preferred lender credit could be offset by a higher rate or fees.
- Confirm taxes and valuation: Some upgrades may not increase appraised value, even if you love the look.
Put incentives in writing
Insist that every incentive is in your purchase contract with exact dollar amounts, timing, and conditions. Clarify whether the incentive survives an appraisal shortfall and how it applies if you change selections.
Your comparison worksheet
Use these line items to build an apples‑to‑apples view of competing west Cary homes or builder offers.
Purchase pricing
- Base home price
- Lot premium
- Promotional price change
- Adjusted contract price
Upfront cash to close
- Earnest money deposit and refund terms
- Option or differential deposits
- Down payment
- Closing costs (lender, title, prepaids, taxes, recording)
- Credits from builder or lender (subtract)
- Net cash to close
Financing details
- Loan product (single‑close, two‑close, or standard)
- Locked rate and lock expiration date
- Buydown details (temporary or permanent, who pays)
- Monthly PITI estimate
- Interest during construction (estimate using average drawn balance)
- Required reserves
Upgrades and allowances
- Design center allowances
- Value of included upgrades
- Out‑of‑pocket upgrade costs
Ongoing costs
- Property tax estimate and note on reassessment at completion
- HOA fees and any capital contributions
- Utility tap or impact fees
- Homeowners insurance estimate
Timeline and contingencies
- Estimated start, framing, drywall, and CO dates
- Carry costs per month if delayed
- Any penalty or liquidated damages clauses
- Appraisal gap plan
Warranty and protections
- Structural and systems coverage
- Third‑party warranty provider
- Post‑closing service process and any holdbacks
Net effective cost comparisons
- Net price after incentives
- Effective payment after temporary buydowns end
- 1‑year and 5‑year cost projections
Tip: For a 2‑1 buydown, total the monthly payment reduction in year 1 and year 2 to get the full benefit. Compare that number to a closing credit or price reduction to see which wins for you.
Risk management and local checks
Protect your budget and your closing date with a few proactive steps.
- Rate risk: Consider extended locks or a single‑close option that lets you lock the permanent rate at construction closing. Price the lock fee versus potential payment changes.
- Delay risk: Ask for a clear build schedule, completion remedies, and a change‑order process in writing.
- Appraisal risk: Keep an appraisal contingency or a defined appraisal gap plan in your contract.
- Builder performance risk: Request on‑time completion data for the same community, and confirm lien waiver steps at each draw.
- Local items to verify: Which permitting authority applies, expected water/sewer tap or impact fees, HOA covenants and initial fees, and how Wake County will estimate taxes in escrow before reassessment.
Smart questions to ask
Ask your lender
- Do you offer single‑close construction‑to‑permanent loans? When is the permanent rate locked and what are the fees?
- What extended lock and float‑down options are available? What are the costs and limits?
- What documentation and reserves will you require for a construction loan?
- How are disbursements and inspections handled during construction?
Ask your builder
- Which incentives are included, in exact dollar amounts, and are they contingent on your preferred lender or title company?
- What is the expected build timeline and what remedies exist if completion is delayed?
- Can you share recent completion dates for similar homes in this community?
- How are change orders priced and processed, and can I review a sample allowance sheet?
Clarify in the contract
- How will appraisal shortfalls be handled?
- What warranty coverage is included, and is it backed by a third party?
Your next step
If you’re building in west Cary, a clear plan for financing, locks, and incentives can save you time, money, and stress. If you want a second set of eyes on your numbers or help comparing builder offers, reach out for a friendly, no‑pressure consult. Start your move with Charlize Vega: Start Your Move — Book a Free Consultation.
FAQs
What is a single‑close construction‑to‑permanent loan for Cary builds?
- It’s one application and closing where your lender funds construction draws and converts the loan to a standard mortgage at completion, often with one set of closing costs.
How long do west Cary production homes usually take to build?
- Many production homes finish in about 4–9 months, but custom projects and permitting can lengthen the timeline.
Should I choose an extended rate lock for a new build?
- If your build timeline exceeds 60 days, an extended lock can reduce rate risk; compare the lock cost to potential payment changes if rates move.
How do builder 2‑1 buydowns compare to closing credits?
- A 2‑1 buydown lowers payments in years 1–2; total the savings and compare it to a lump‑sum credit or price reduction to see which delivers more value.
Who handles permits and inspections for west Cary homes?
- Inside Cary limits, Town of Cary Development Services manages permits and inspections; in unincorporated areas, Wake County does, and your builder should confirm which applies.
