This program simplifies the financing process for borrowers looking to build a new home or renovate an existing property. It combines the construction loan and permanent financing into a single loan, reducing the need for multiple closings and potentially saving time and money for the borrower. With one application and one set of closing costs, borrowers can secure financing for both the construction phase and the long-term mortgage, making it an attractive option for those seeking convenience and flexibility in their home construction projects. Additionally, it allows you to purchase the land for you to build your new home on, streamlining the entire process from land acquisition to move-in.
A One- time close construction loan, also known as a construction-to-permanent loan, covers both the construction and permanent financing of a property. This means that instead of obtaining two separate loans (one for construction and one for permanent financing), borrowers can get one loan that covers the entire process. The loan is typically structured in two phases: the construction phase and the permanent stage.
There are several reasons why a One- time close construction loan is essential:
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Convenience:Â By obtaining one loan that covers construction and permanent financing, borrowers can avoid the hassle of obtaining two separate loans.
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Cost savings:Â One- time close construction loan can save borrowers money in closing costs and fees associated with obtaining multiple loans.
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Predictability:Â With a One- time close construction loan, borrowers have more control over their financing, which can lead to better budgeting and financial planning.
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Time savings:Â One- time close construction loan can save borrowers time by streamlining the financing process and reducing the time needed to secure funding.
A One- time close construction loan is typically structured in two phases:
- Construction phase: During construction, borrowers can draw funds from the loan to pay for the costs associated with building their property. The lender will typically disburse funds to the borrower in stages as construction milestones are reached. Interest-only payments are made during the construction phase.
- Permanent phase: The loan is converted into a permanent mortgage once construction is complete. At this point, the borrower will begin making principal and interest payments on the loan. The interest rate on the permanent mortgage is typically locked in when the loan is originated.
