One-Time Close– The Ideal Type of Construction Loan
There is probably nothing as rewarding as custom building your dream home —with the tile floor you saw in that magazine blog, that home office space design you envisioned, the elegant range hood and the extra storage space for all your hidden treasures, and the tall windows and the high ceiling you’ve always wanted. It is difficult to find an already-built home that suits your entire family’s needs, yet custom building a dream home may sound like an impossible and unreachable goal. However, that is not necessarily true anymore—especially with today’s unbelievably low interest rates. All you need to do is have a dream, visit with a quality builder, and then find the right financing option—like the One-Time Close Construction Loan option.
In a typical scenario, when you finance the construction of your home, you will need to complete a loan application and get pre-approved for the mortgage through a commitment letter. Afterwards, a second approval from the interim lender or bank is required for the funds used to construct the home. Finally, as the construction completes, the permanent lender will request a new loan approval for the permanent mortgage loan which pays the remaining balance of the interim construction loan and becomes the homebuyer’s permanent home loan.
The downside to the typical loan process described above is that, because it is a second loan, the permanent financing has to be approved, and matters can get complicated if your financial situation has changed negatively during the period between your interim and your permanent loan application. Changes in interest rates in the time between the two loans can also be a negative factor. When you add to this the fact that with the traditional two-loan process you will have to pay two sets of closing costs and invest more of your time, it becomes obvious why the One-Time Construction Loan is an ideal option.
So, what is a One-Time Close Construction Loan? South Texas construction loan specialist Andrew Riddle from Thrive Mortgage in McAllen, Texas, defines and explains the One-Time Close: “The One-Time Close Program eliminates the interim construction loan step altogether and requires only one qualification process, one set of closing costs, and one mortgage loan that closes up front before the construction even starts. Instead of two loans, you only need one.”
When following the attractive One-Time Close scenario, you will go through the pre-approval process before you begin the construction of your new home. The advantage here is that the interim construction lender and the permanent mortgage lender are the same one. No commitment letter is required; you will only need to fill out a declaration where you state that you will move into your new home once it’s completed. With the One-Time Close option, you get pre-approved at the beginning of the process for both a construction loan and a permanent mortgage loan. The advantages, aside from saving time, are that if your credit status changes after you close on the loan, it won’t matter—your home loan has already been approved at that point. You also won’t be susceptible to increases in interest rates since you would have locked in your rate.
One-Time Close construction loans can help speed up the realization of your dream of homeownership, and the professionals at Thrive Mortgage would be happy to be your one-stop financing consultants. By choosing them and the One-Time Close Program, you will have lower down payment requirements, and your construction loan specialists at Thrive Mortgage will control all transactions, protecting the funds and avoiding unforeseen mishaps with your building contractor. If there’s one time you should consider a One-Time Construction Loan, it’s now. Take advantage of the super-low interest rates currently available. For more information, contact Thrive Mortgage: 3700 N 10th Suite 301, McAllen, Texas, 78501 or (956) 306-1114.