Mortgage Payments for Your Construction Loan
February 3, 2022
How much will your monthly mortgage payment be for an FHA or VA One-Time Close construction loan?
These loans are meant to streamline the construction loan process by eliminating the need for a separate loan to build the home, reducing two applications, two loan approvals, and two closing dates into a single loan with one closing process and no worries about being denied for the second loan.
So with the One-Time Close loan, you don’t have to apply twice; some borrowers at this stage ask “What’s the catch?” They expect higher down payments required in exchange for the simpler loan, or they expect that they cannot build a home from scratch with a One Time Close loan as a first-time borrower.
But neither of those things are true--you can apply for a construction loan as a first-time buyer and you don’t have to make a larger down payment just because you want to build on your own lot instead of buying someone else’s property.
So how do you estimate the monthly mortgage payment on an FHA or VA construction loan?
Online mortgage calculators can help. The online mortgage calculator can help you determine an estimate of the monthly payment, how much loan you can afford, and more but the right information is needed to make the process work.
What is that information? Your proposed loan amount divided by the loan term (the number of months you will pay on the loan) is important, but you must also factor in hazard insurance, mortgage insurance premiums and other costs included in the loan such as when the borrower chooses to finance the FHA Up-Front Mortgage Insurance Premium.
Aside from principal and interest, the following expenses may affect the amount of your monthly payment with an FHA One-Time Close construction loan or its’ VA construction loan equivalent:
Want More Information About One-Time Close Loans?
We have done extensive research on the FHA (Federal Housing Administration) and the VA (Department of Veterans Affairs) One-Time Close Construction loan programs. We have spoken directly to licensed lenders that originate these residential loan types in most states and each company has supplied us the guidelines for their products. We can connect you with mortgage loan officers who work for lenders that know the product well and have consistently provided quality service. If you are interested in being contacted by a licensed lender in your area, please send responses to the questions below. All information is treated confidentially.
OneTimeClose.com provides information and connects consumers to qualified One-Time Close lenders to raise awareness about this loan product and to help consumers receive higher quality service. We are not paid for endorsing or recommending the lenders or loan originators and do not otherwise benefit from doing so. Consumers should shop for mortgage services and compare their options before agreeing to proceed.
Please note that investor guidelines for the FHA and VA One-Time Close Construction Program only allows for single family dwellings (1 unit) – and NOT for multi-family units (no duplexes, triplexes or fourplexes). In addition, the following homes/building styles are not allowed under these programs: Kit Homes, Barndominiums, Log Cabin Homes, Shipping Container Homes, Stilt Homes, Solar (only) or Wind Powered (only) Homes.
Contact Us: Send Us Your Request – Spam Safe
Please send your email request to [email protected] which authorizes OneTimeClose.com to share your personal information with one mortgage lender licensed in your area to contact you.
1. Send your first and last name, e-mail address, and contact telephone number.
2. Tell us the city and state of the proposed property.
3. Tell us your and/or the Co-borrower’s credit profile: Excellent – (680+), Good - (640-679), Fair – (620-639) or Poor- (Below 620). 620 is the minimum qualifying credit score for this product.
4. Are you or your spouse (Co-borrower) eligible veterans? If either of you are eligible veterans, down payments as low as $0 may be available up to the maximum amount your debt-to-income ratio per VA will allow – there are no maximum loan amounts as per VA guidelines. Most lenders will go up to $1,500,000 and review higher loan amounts on a case-by-case basis. If not, the FHA down payment is 3.5% up to the maximum FHA lending limit for your county.
These loans are meant to streamline the construction loan process by eliminating the need for a separate loan to build the home, reducing two applications, two loan approvals, and two closing dates into a single loan with one closing process and no worries about being denied for the second loan.
So with the One-Time Close loan, you don’t have to apply twice; some borrowers at this stage ask “What’s the catch?” They expect higher down payments required in exchange for the simpler loan, or they expect that they cannot build a home from scratch with a One Time Close loan as a first-time borrower.
But neither of those things are true--you can apply for a construction loan as a first-time buyer and you don’t have to make a larger down payment just because you want to build on your own lot instead of buying someone else’s property.
So how do you estimate the monthly mortgage payment on an FHA or VA construction loan?
Online mortgage calculators can help. The online mortgage calculator can help you determine an estimate of the monthly payment, how much loan you can afford, and more but the right information is needed to make the process work.
What is that information? Your proposed loan amount divided by the loan term (the number of months you will pay on the loan) is important, but you must also factor in hazard insurance, mortgage insurance premiums and other costs included in the loan such as when the borrower chooses to finance the FHA Up-Front Mortgage Insurance Premium.
Aside from principal and interest, the following expenses may affect the amount of your monthly payment with an FHA One-Time Close construction loan or its’ VA construction loan equivalent:
- Hazard insurance
- Property taxes
- Mortgage insurance
- Required special assessments
- Payments for any secondary financing
- Escrow requirements
Want More Information About One-Time Close Loans?
We have done extensive research on the FHA (Federal Housing Administration) and the VA (Department of Veterans Affairs) One-Time Close Construction loan programs. We have spoken directly to licensed lenders that originate these residential loan types in most states and each company has supplied us the guidelines for their products. We can connect you with mortgage loan officers who work for lenders that know the product well and have consistently provided quality service. If you are interested in being contacted by a licensed lender in your area, please send responses to the questions below. All information is treated confidentially.
OneTimeClose.com provides information and connects consumers to qualified One-Time Close lenders to raise awareness about this loan product and to help consumers receive higher quality service. We are not paid for endorsing or recommending the lenders or loan originators and do not otherwise benefit from doing so. Consumers should shop for mortgage services and compare their options before agreeing to proceed.
Please note that investor guidelines for the FHA and VA One-Time Close Construction Program only allows for single family dwellings (1 unit) – and NOT for multi-family units (no duplexes, triplexes or fourplexes). In addition, the following homes/building styles are not allowed under these programs: Kit Homes, Barndominiums, Log Cabin Homes, Shipping Container Homes, Stilt Homes, Solar (only) or Wind Powered (only) Homes.
Contact Us: Send Us Your Request – Spam Safe
Please send your email request to [email protected] which authorizes OneTimeClose.com to share your personal information with one mortgage lender licensed in your area to contact you.
1. Send your first and last name, e-mail address, and contact telephone number.
2. Tell us the city and state of the proposed property.
3. Tell us your and/or the Co-borrower’s credit profile: Excellent – (680+), Good - (640-679), Fair – (620-639) or Poor- (Below 620). 620 is the minimum qualifying credit score for this product.
4. Are you or your spouse (Co-borrower) eligible veterans? If either of you are eligible veterans, down payments as low as $0 may be available up to the maximum amount your debt-to-income ratio per VA will allow – there are no maximum loan amounts as per VA guidelines. Most lenders will go up to $1,500,000 and review higher loan amounts on a case-by-case basis. If not, the FHA down payment is 3.5% up to the maximum FHA lending limit for your county.
See Your Credit Scores From All 3 Bureaus
Do you know what's on your credit report?
Learn what your score means.
Articles, Updates, and Guidelines
Choosing The Right Place To Build Your Home
April 19, 2024Building a new home on your own means sorting out crucial details. There are builders to hire, floor plans to review, and budget concerns to work out. And then there are the details of the home itself. Is it close enough to essential services, schools, and major highways? Is it far enough away from shopping centers and mass transit?
Building A Home in Florida with a VA / FHA Construction Loan
April 14, 2024The current VA backed One-Time close construction loan to permanent financing allows eligible Veterans to build a new home with $0 down. The FHA version allows for 3.5% down. These One-Time Close loan types are thriving in Florida and could be the right choice for your family. Learn about these One-Time Close mortgages to and build a home that suits your exact needs.
How Construction Loans Vary
April 12, 2024What do we mean by our headline? There are many ways VA and FHA One-Time Close construction loans differ from other types of mortgages, but how do single-close loans differ from each other Each single-close loan program has unique features for the loan's standard features.
