Home Financing Made Easy
5 Reasons To Get A One-Time Construction Loan
Finding the right financing when building a custom home can be a challenge. Traditionally, you would go for a standard two-loan option. This means qualifying for a short-term loan to finance construction and a separate long-term loan for the mortgage.
You can make home financing much easier with a one-time construction loan—one lender, one appraisal, one loan qualification, one closing. This loan streamlines the entire process and brings you the amazing benefits below.
1. You Only Need to Qualify Once
A one-time construction loan has one lender finance both your building costs and mortgage. Rather than qualifying for two loans, this all-in-one financing option saves you time and effort as you need to fill out the paperwork and qualify only once. Plus, it helps eliminate duplicate fees, as well as future worries, should your financial status change before your home is completed.
2. One Loan ReducesYour Closing Costs
Since one lender finances the entire loan, you only need to pay closing costs once. Overall, you’re looking at thousands of dollars worth of savings by not paying twice for loan origination fees, appraisals, title searches, and title insurance. You can use the money you save to pay for other home ownership costs or to increase your property value. For example, you can build a home that qualifies for a high-performance certificate from a recognized certification program like BUILT TO SAVE®.
3. Enjoy Peace of Mind with PermanentFinancing
Knowing that you’ve qualified for the one-time construction loan drastically reduces the stress of dealing with unexpected events. According to the U.S. Census Bureau, building a home can take up to a year. A lot can change in the meantime — you may lose your job, see a significant drop in your income, or incur sudden expenses. With a standard two-loan option, such events may prevent you from qualifying for the permanent mortgage loan. You could even lose your home in foreclosure.
When you qualify for a one-time construction loan, you’re automatically approved for both the construction loan and the permanent mortgage loan. You can focus on the building stage without worrying about potential obstacles down the road that would prevent you from moving into your new home.
4. One Appraisal Involves Fewer Risks
As a borrower, one of your biggest worries will be passing the appraisal after your home is complete. If the finished home is appraised at the same value or higher than the original amount, you’re all set. But if the property value is appraised below the original loan, you must pay the difference—and that’s on top of paying the second appraisal fee.
With a one-time construction loan, you need just one appraisal. Not only does this mean that you pay the fee once, but it also reduces the risk of hidden costs if the finished property is valued too low.
5. You Have Plenty of Options to Choose From
One-time close loan options are available for any type of construction mortgage you may need, from conforming to jumbo loans. They are also applicable to government-backed mortgages. And if you can qualify for a VA or USDA loan, you can even enjoy the perks of a zero down payment.
To find out more about One-Time Construction Loans, contact Andrew Riddle / Thrive Mortgage at 956-279-7320, and you’ll be ONE step closer to building your dream home.
Thrive Mortgage is an Equal Housing Lender Branch NMLS# 1900816 /RMLO NMLS#1469914.
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