When Is the Down Payment Due for a New Construction Home?

• Builder deposits (earnest money) are paid at contract signing and credited toward your overall down payment.
• Through our partner Texas Mortgage Associates, you can explore construction-to-permanent loans or separate construction and mortgage financing—each with its own payment timing.
• Your credit profile, loan program, and selected floor plan can all affect the size and timing of required payments.
• Payment milestones align with contract execution, key construction phases, and issuance of your Certificate of Occupancy.

Are you wondering exactly when you’ll need to put down money on your new home? From the builder deposit at contract signing to the down payment at closing, knowing each due date keeps your budget on track. 

Whether you’re choosing one of our spec or quick-move-in homes or building fully custom on your lot, this guide lays out every payment milestone—so you can design and build your North Texas dream home with confidence.

Unlike resales, new-build transactions involve staged payments. First comes the builder deposit—your earnest money—to lock in your floor plan and lot. The larger down payment is then due at the closing table, when title transfers and your mortgage funds.

Your choice of financing shapes these timelines. Texas Mortgage Associates can structure a construction-to-permanent loan (one closing, interest-only draws during build) or separate construction and mortgage loans (two closings). Knowing each option’s schedule ensures you’re prepared at every step.

Initial Costs

• Builder Deposit (Earnest Money): Typically 5%–10% of your home’s base price, due when you sign your purchase agreement.
• Design/Upgrade Deposits: Any selected options (e.g., upgraded cabinetry, outdoor living packages) often require an additional deposit at contract.

Long-Term Payments

• Construction-Phase Draws: For construction-to-permanent loans, you’ll pay interest only on funds drawn during framing, mechanical installs, and finishes.
• Down Payment & Closing Costs: At final closing—once your Certificate of Occupancy is issued—you pay the remainder of your down payment plus title, escrow, and lender fees.

By mapping these out early, you’ll avoid surprises and keep your financing on schedule.

1. Contract Signing
   • Builder Deposit & Option Deposits locked in.
2. Construction Phase
   • Interest-Only Payments (if using construction-to-permanent).
   • Milestone Reviews to confirm budgets before major work.
3. Pre-Closing
   • Loan Conversion or Second Closing (for separate construction loan).
4. Final Closing
   • Down Payment Due (remaining balance on your required down payment).
   • Closing Costs Paid (escrow, title, recording, etc.).
   • Certificate of Occupancy Issued and keys handed over.

Minimum Down Payment Expectations

• Construction-to-Permanent Loans: Often require 5%–10% total down, with builder deposit credited at closing.
• Separate Construction & Mortgage Loans: Construction loans may need a 10% deposit, then a conventional down payment (5%–20%) at mortgage closing.
• Credit & Loan Program: Better credit scores and stronger financial profiles typically unlock lower down-payment options and more competitive rates through Texas Mortgage Associates.

Factors Influencing Your Down Payment

• Loan Structure: One-close vs. two-close financing affects when and how much you pay.
• Floor Plan & Upgrades: Higher-priced plans or extensive options increase deposit requirements.
• Personal Financial Profile: Income stability, debt-to-income ratio, and savings levels guide lender requirements.

Through Texas Mortgage Associates

• Construction-to-Permanent: Single closing; interest-only draws during build, then automatic conversion to your permanent loan.
• Dedicated Construction Loans: Two closings but flexible draw schedules tailored to your project pace.
• Local Expertise: Their team knows North Texas permitting and appraisal nuances, smoothing your timeline.

Conventional Mortgage Path

• Separate Build and Purchase: You secure a construction loan, then shop rates for a permanent mortgage at project end.
• Rate Shopping: Potentially lower long-term rates, but two closings means duplicate fees.
• Wider Lender Pool: Can compare national and local lenders, though may lack the build-phase support of TMA’s specialists.

• What They Are: Initial earnest money (5%–10%) paid at contract signing, guaranteeing your lot and floor plan.
• What They Cover: Reservation of your build slot, preliminary plan work, and any selected structural options.
• Application: Credited in full toward your down payment at final closing.
• Legal Note: Deposits are refundable only under contract-specified contingencies (e.g., financing denial, title issues).

Understanding when your down payment and related costs are due helps keep your home build on time and on budget. By coordinating closely with your project manager and Texas Mortgage Associates, you’ll have clear milestones from deposit to closing.

Ready to review your payment schedule? Contact us today to lock in your plan and start building!

What is the typical percentage for a down payment on a new construction?

The typical down payment for a new construction ranges from 5% to 20%, though certain loans like VA or USDA financing allow for 0% down payment. Conventional loans require a minimum of 3%, with higher percentages influenced by credit score and financial situation.

Can down payment amounts be negotiated with builders?

Yes, negotiations can occur. Builders may adjust down payment requirements based on your financial situation and credit approval. Consult with a real estate agent to determine negotiation options and secure terms that align with your payment capabilities.