One-Time Close Construction Loan

Product Features:

Our construction programs is the "One-Time Close" loan, which is also known as a "Single Close", "Construction-to-Permanent" or "CTP" loan. A "One-Time Close" loan allows you to build or rehabilitate a primary or vacation home. One-time close means that there is one application and one closing for the purchase or refinance of the lot, construction costs and the permanent mortgage. Although a lot may be purchased with this type of loan, unless you are buying the lot from a builder that has plans that are acceptable to you, the lot will probably have to be purchased separately. Sellers do not usually want to delay a lot sale while you obtain approved plans to qualify for a construction loan.

As a combination loan program, a "One-Time Close" bundles up to three loans in a single application and closing. At the closing, you will receive financing for the purchase of a lot. If you already own the lot, then it will be refinanced so that you can use your equity in the lot as a down payment for construction. In addition to providing for the purchase or refinance of the lot, a "One-Time Close" loan finances your construction costs. You access funds by making draw requests during the construction. Once construction is finished and you receive a certificate of occupancy, the loan converts to a permanent mortgage. The rate of your permanent mortgage can be locked at the beginning of construction or you may exercise a "float down" option that allows you to benefit from declining interest rates. Depending upon the program that you select, there may be a charge for the "float down" or to lock your rate. You may select from fixed or adjustable rate programs during the construction phase and for the permanent mortgage.

By combining up to three loans in a single application and a single closing, you save money on escrow fees, title insurance fees, recording fees, flood certification fees and appraiser fees. You also secure your permanent mortgage so that you do not have to worry about what will happen if your financial situation changes and you are not able to qualify for a mortgage when the home is finished. Another advantage is that the "One-Time Close" loan allows you to borrow money based upon the future value of the home. The future value is determined by an appraiser who reviews the building plans, compiles comparable sales data and renders a written opinion as to the value of the home once it is built. For example, if the future value of your home is appraised at $600,000, and you can meet the financial requirements for qualifying, then you will be able to borrow up to 95% of this amount or $570,000. For people who have excellent credit, there are programs that may allow them to borrow 100% of the future value of the home.