There are a lot of loan programs out there in today's market that are meant for buyers who are looking to construct thier own homes. The majority of these loan programs are separated into 2 stages: 1) the construction, and 2) the permanent financing. If they are separated into this, the client needs to close twice (what a pain that is, huh)!
My suggestion to you: open the door to more options that work better for you and your builder!
A One-Time-Close loan product is specifically intended for this exact scenario (though there are other uses that I will go into in later blogs). This means that the construction end of the financing is taken care of as well as the permanent financing. Rates are conventionally priced with similar (if not the same) percentage for financing.
Here's how it works:
- You apply for the loan
- I get you pre-qualified for the loan
- You get quotes on the building of your home from a certified contractor/builder
- We close after stipulations are met depending on your situation (each client is unique)
- During the construction period, you are paying interest only until the home is finished
- Construction financing can range up to 15% originally anticipated from the builder/contractor
- Funds are held in escrow until needed
- House is complete
- We get a certificate of occupancy from the contractor/builder
- Your loan turns into a conventional Princ. and Interest payment
That sounds, and is, a lot easier than having to worry about qualifying and going through underwritting twice, right?
;)
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