What is construction-to-permanent financing and how can it help you build a new home?

If you’re buying a homesite on which to build a custom home, construction-to-permanent financing will be the primary loan type you will probably use for financing your project through to completion.

A construction-to-permanent loan may also be known as a single-close loan. This loan converts to a standard mortgage at the completion of construction. The benefit of construction-to-permanent financing is that it allows you to combine your construction financing and permanent mortgage into one loan. In a nutshell the benefits to this type of loan are:

1)     One application

2)     One fixed-rate or adjustable-rate closing

3)     Make interest-only payments on funds as they are disbursed during the process

4)     The purchase price of your home is included in the financing

If you value certainty and want to lock in your rate while your home is constructed, this could be a great tool for you.

If you like the idea of saving money with one closing – not to mention your time in having only one application process – this could be a great tool for you.

And lastly, if you can appreciate the flexibility and convenience this type of loan provides during the complex process of building your new home, we’d love to chat with you about your specific goals and needs. Our financing partners are standing by to assist you! 

Connect with our team today!