A One Time Close Construction Loan is a mortgage financing option for new home construction. This loan program combines financing for a lot purchase (or lot payoff), home construction costs and mortgage into "one loan".
There are two phases to this loan program: an "interest only" construction phase and a permanent mortgage phase; however, there is only oneclosing. The borrower pre-selects a construction term of either 6, to 24 months based on the amount of time needed to build the home. The Builder, or General Contractor, requests incremental draws or line item draws during the construction phase for payment of materials, supplies and labor. "Interest only" payments are due each month based on the outstanding drawn balance of the construction loan. Once the home is 100% complete, the borrower automatically converts the loan into the permanent mortgage; thus, no additional fees, re-qualification, or paperwork is required.
Troy Schuricht
7575 E Redfield Rd Suite 235
Scottsdale, AZ 85260
480-305-8905 - office
480-393-8801 - fax
http://www.communityfirstfinancial.com/
http://www.yourlendertroy.blogspot.com/
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I'm closing on one in January. The only problem with the "one closing construction loans" is that the buyers have to be contingent free. If they need the money from their exising home to close, the "one time" is often too quick.
But, it has it's place.