Construction Loan Article Center

Tuesday, May 29, 2007

16. I know people who recommend I get a single-close loan. What exactly is that?

Up until recently, if you wanted to build a new house, you had to obtain two different loans, often with two separate lenders. This made it necessary for the borrower to qualify two separate times: once prior to the construction loan then again prior to the long-term loan. Another negative aspect of two separate loans was the presence of two sets of closing costs. Single close loans, on the other hand, encompass not only the construction periods but the permanent loans as well.

Additionally, there are two sets of closing costs.

We offer a single-close loan, called a Construction-to-Permanent loan, with a 6, 9, 12 or 18 month construction period and a 15-or 30-year fully amortizing permanent phase. We also offer rate protection during both phases of the loan and a rate roll down option.

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