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The 3%, 6% and 9% figures posted earlier (depending on your down payment) are correct however, keep in mind that if the actually closing costs and prepaids amount to less than the applicable percentage than the builder/seller is not allowed to credit that cash back to the buyer at closing nor are you allowed to use that surplus towards your down payment...I originate loans in Montgomery County and the builder would be allowed to include the annual property tax (though many homeowners pay bi-annually in our county). Also, the surplus can be used to buy down the interest rate with a temporary or perm. rate buydown...finally, you can always ask the seller to include finishing the basement or other options if you are trying to negotiate more but once again, no cash can come back to you at the table.
make sure that whatever is left of the builder incentive is used to lower the purchase price.
You might not get it all in closing cost help.
And most likely you won't get a single penny towards down payment nowadays.
Banks want at least 5% of your own funds regardless of how much the builder wants to give you in this troubled mortgage market.
So, if they are offering a flat 30,000 incentive. Use as much as allowed for closing costs....put down your 5%...then reduce the price by whatever incentive is leftover.
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