Does the thought of a getting a construction loan terrify you or your client? Does it seem over-whelmingly complicated? There is a simplier way. The answer is the one-time construction loan. This loan gives clients the opportunity to have the ability to put the permanent loan in place before construction begins. This loan offers borrowers a construction-permanent loan with one set of closing costs. In addition, there is no need to update the credit documents or re-qualify the borrower at a later date, provided that the improvements are completed with in the allotted time period and there is no change to the interest rate. The one-time close will automatically roll into a amortizing loan of the borrower's choice. The one-time construction loan allows the borrower to cap their rate with a float down feature. The float-down feature acts as a "cap" with the final rate being determined when the home is complete. It is important to ensure the cap term selected (ie 120 days, 180 days etc) is long enough to cover the period of time needed to process, approve, close and fully complete construction and "roll" the loan to permanent financing. Extension fees can be expensive. The borrower must qualify at the cap rate and the payments during construction are interest only and based on the amount disbursed. Converstion to fully amortized payments of principle and interest can take place when the property is 100% complete. When the permanent loan is in place prior to construction, the loan amount or term may not be modified. Therefore, it is imperative that the borrower and the builder understand that any changes or modifications to the cost will need to be paid outside of the closing. If the customer qualifies, the loan will allow for an interest reserve. The interest reserve is an amount of interest that is included in the cost to construct so that the borrower does not have to pay any payments during construction. As draws are issued, the monthly interest owed by the borrower will be deducted from the interest reserve. If the interest reserve account is depleted because construction took longer than expected the borrower will be billed monthly for the outstanding interest owed. In a nutshell, the one time close is perfect for the customer that does not want the additional closing costs assocated with a tradition construction loan followed by a permanent loan. The borrower only has to qualify once and they know exactly what the loan amount is going to be. Now its time to go build the home of your dreams.