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One- time close construction loan

A one-time close construction loan is a financing option specifically designed for individuals or companies who want to build their own custom homes or investment properties.

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What is a One- time close construction loan?

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.

Why is a One- time close construction loan essential?

There are several reasons why a One- time close construction loan is essential:

  • Convenience: By obtaining one loan that covers construction and permanent financing, borrowers can avoid the hassle of obtaining two separate loans.
  • Cost savings: One- time close construction loan can save borrowers money in closing costs and fees associated with obtaining multiple loans.
  • Predictability: With a One- time close construction loan, borrowers have more control over their financing, which can lead to better budgeting and financial planning.
  • Time savings: One- time close construction loan can save borrowers time by streamlining the financing process and reducing the time needed to secure funding.

How does a One- time close construction loan work?

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.

Here are some key features of One- time close construction loan

  • Interest-only payments during the construction phase
  • Lower down payment requirements than traditional mortgages
  • Fixed interest rates on the permanent mortgage
  • Construction draws are typically based on the percentage of work completed
  • Construction contingency reserves are required to cover unexpected costs

BRAVO MORTGAGE

We bring a customized, unique approach to mortgages. Our lending solutions use the perfect hybrid of human-driven insights and technical prowess to process loans faster and significantly reduce costs.

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786-429-3521

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Miami Florida 33186
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Disclosure:
The content provided within this website is presented for information purposes only. This is not a commitment to lend or extend credit. Information and/or dates are subject to change without notice. All loans are subject to credit approval. Other restrictions may apply. Mortgage loans may be arranged through third party providers.
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