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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October 22, 2024One-Time Close construction projects are subject to many variables that can change their timelines. Weather is a particularly unpredictable factor to consider, and depending on where you live, issues may range from snow and rain to extreme temperatures. Weather is a variable that can cause construction disruptions, delays, potentially increased costs, and frustration for borrowers. Knowing that upfront can help, especially when it is time to plan your contingency fund.
October 21, 2024There is a FHA and VA government backed One-Time Close construction to permanent loan program available in Illinois for qualified applicants who are looking to build a brand-new home versus a resale.
October 15, 2024Building a new home can be exciting. It can also be a complex process, and it pays to understand as much of it as possible while planning your home loan. If you want to use a one-time close residential construction loan to build your home from the ground up, there are three things to consider.
