Build a Home on Your Own Lot
The One-Time Close Loan is a mortgage program that finances the lot purchase (if necessary), the construction and permanent loan of a new home, all wrapped up in a single mortgage with a single closing. That's why it's called a "One-Time Close."
If you've decided to have your new home built from scratch, you might be wondering how to finance the construction and purchase. Previously, your only option would have been to secure a construction loan and then applying again for a permanent mortgage. You would have two closings, which means paying two sets of closing costs and having to re-qualify for the second loan once construction is complete.
The One-Time Close Loan, also known as a Single Close Loan, combines this process with a construction-to-permanent mortgage. You need only qualify once and pay a single set of closing costs. Your fixed-interest rate is locked in and the entire loan is in place before construction on your new home begins. Payment is only due after construction is complete when the loan automatically converts to a permanent mortgage.
Who Is This Loan For?
Homebuyers who are having trouble finding their dream home might decide it's not the right time for them to buy. After all, why go through the stress of a mortgage process for a home that you're just settling for? Well, maybe you don't have to! Maybe you can have the home you want - down to all the details and specifications - built from the ground up, with your own specifications. The One-Time Close loan can make that process a little easier for first-time homebuyers, and our lenders can help you find skilled contractors to make that dream home a reality.
You might even own your land already! This makes things more affordable and simpler. By owning the land your future home is going to sit on, you can use any equity you have accumulated towards your down payment.
Benefits of a One-Time Close Loan
The One-Time Close loan gets you from ground-breaking to move-in with a single mortgage, which streamlines the process, significantly. But it takes the pressure off you in other ways as well. The Department of Veterans Affairs (VA) and the Federal Housing Administration (FHA) both offer a version of the Single Close loan. While each agency may have certain additional requirements, there are some aspects both share.
Similar to other loans offered by the VA and FHA, the One-Time close loan comes with low interest rates as well. Getting a VA or FHA loan also means that you won't have to put up a huge down payment before construction starts, since these agencies have low requirements for upfront payment.
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December 20, 2022When planning to build a home with a One-time Close construction loan, there are some basic expectations you should have going into the process. For example, you should not assume it is possible to build a home without a down payment. But that's a very obvious issue. What about more complex aspects of building a home on your own lot?
December 15, 2022Government home loan limits are increasing in 2023 and there are indications that the housing market in general may become more favorable to buyers as the new year wears on. No, that won't happen overnight. But the predictions at press time seem to indicate better days are coming.
December 13, 2022The U.S. Chamber of Commerce describes non-bank lenders as a financial institution that lends money but doesn't operate with a full banking license. It does not offer deposit, checking, or savings services. This definition is important, because non-bank entities have become more common in the construction loan space over the years, and now the federal government is stepping up efforts to hold these companies accountable should they run afoul of the law.
