Build a Home on Your Own Lot
The One-Time Close Loan is a mortgage program that finances the lot purchase (if necessary), the construction and permanent loan of a new home, all wrapped up in a single mortgage with a single closing. That's why it's called a "One-Time Close."
If you've decided to have your new home built from scratch, you might be wondering how to finance the construction and purchase. Previously, your only option would have been to secure a construction loan and then applying again for a permanent mortgage. You would have two closings, which means paying two sets of closing costs and having to re-qualify for the second loan once construction is complete.
The One-Time Close Loan, also known as a Single Close Loan, combines this process with a construction-to-permanent mortgage. You need only qualify once and pay a single set of closing costs. Your fixed-interest rate is locked in and the entire loan is in place before construction on your new home begins. Payment is only due after construction is complete when the loan automatically converts to a permanent mortgage.
Who Is This Loan For?
Homebuyers who are having trouble finding their dream home might decide it's not the right time for them to buy. After all, why go through the stress of a mortgage process for a home that you're just settling for? Well, maybe you don't have to! Maybe you can have the home you want - down to all the details and specifications - built from the ground up, with your own specifications. The One-Time Close loan can make that process a little easier for first-time homebuyers, and our lenders can help you find skilled contractors to make that dream home a reality.
You might even own your land already! This makes things more affordable and simpler. By owning the land your future home is going to sit on, you can use any equity you have accumulated towards your down payment.
Benefits of a One-Time Close Loan
The One-Time Close loan gets you from ground-breaking to move-in with a single mortgage, which streamlines the process, significantly. But it takes the pressure off you in other ways as well. The Department of Veterans Affairs (VA) and the Federal Housing Administration (FHA) both offer a version of the Single Close loan. While each agency may have certain additional requirements, there are some aspects both share.
Similar to other loans offered by the VA and FHA, the One-Time close loan comes with low interest rates as well. Getting a VA or FHA loan also means that you won't have to put up a huge down payment before construction starts, since these agencies have low requirements for upfront payment.
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February 20, 2025Imagine you’re building a house. Traditionally, you'd get one loan for the construction, then another to buy the finished house. An One-Time Close construction loan (also known as an OTC mortgage) simplifies this. It's a single loan that covers both the construction and the final mortgage. You close just once, hence the name. Government programs like FHA, VA, and USDA offer these options to qualified applicants.
January 23, 2025Saving for a down payment is a big challenge in building a home. It may seem daunting until you learn about the factors affecting how long it takes to save and the strategies you should consider to reach your goal faster. In addition, there is the need to save for closing costs, and it becomes clear that a detailed plan may be needed to get you into your new dream home. How long will you save the money for your home loan costs, including downpayment? Much depends on your personal circumstances.
January 16, 2025Ever dream of building your own home, customized to your exact tastes and needs? Navigating the world of construction loans can be daunting at first. Some people find themselves juggling a short-term loan for the building phase and scrambling to secure a separate mortgage once the house is complete. But there is a more straightforward way: the single-close construction loan.
