One-Time Close Construction Loan: A Guide For Homebuyers
One-Time Close Construction Loan: A Guide For Homebuyers
Building your dream house can be a challenging endeavor, especially when it comes to financing the construction. Traditional construction loans often require two separate closings, one for the construction loan and another for the permanent mortgage, making it a time-consuming and expensive process. But, with the advent of the one time close construction loan, this daunting task has become simpler and more efficient.
Offered by leading mortgage solutions provider, 719 Lending, the One-Time Close Construction Loan combines the construction loan and permanent mortgage into one single closing. This revolutionary financial product is designed to provide a streamlined solution for homebuyers, builders, and real estate professionals in Colorado Springs. The article offers an in-depth look at this loan type, focusing on its benefits, eligibility, process, and more.
Benefits of One-Time Close Construction Loan
Efficiency and Cost-effectiveness
Contrary to conventional methods that necessitate two separate closings, the single close construction loan merges the entire process into one transaction. This not only saves time but also reduces costs related to closing procedures.
Builder-friendly
The loan is especially beneficial for builders who are searching for ‘construction loans near me’. They can kick-start the construction without bearing the upfront costs as the loan disbursement commences even before the construction initiates.
Assurance for Borrowers
Partnering with 719 Lending ensures peace of mind for borrowers, as they are considered reliable va construction loan lenders. They thoroughly vet contractors, guaranteeing quality workmanship and protecting the borrowers’ investment.
Competitive Terms
Compared to other lenders, 719 Lending offers a program with lower interest rates, minimal down payments, and less strict documentation requirements, similar to the fha one time close construction loan.
Post-approval Ease
Once approved, borrowers don’t need to undergo re-approval for no money down construction loans. This simplifies the process and eliminates the need for any additional steps.
Understanding How One-Time Close Construction Loan Works
Single Closing Transaction
The loan consolidates construction financing and the permanent mortgage into a single closing, known as an otc loan. The closing occurs prior to the start of construction, covering both the construction and permanent financing aspects.
Loan Types
Land loans in Colorado primarily come in two types. Purchase loans are for borrowers buying the lot and constructing the home, often referred to as land loans Colorado, while refinance loans, another form of Colorado land loans, are for those who already own the lot and seek to finance the construction.
Construction Period and Terms
The construction period for construction loans in Colorado extends from the initial draw at closing to the completion of the project. 719 Lending collaborates with Granite Risk Management to effectively manage the project and ensure it remains on track with the Colorado construction loans’ terms.
The Role of Granite Risk Management
Fund Management
Granite oversees the disbursement of funds throughout the construction, releasing them in increments as the construction progresses, which is a practice known as contractor draw, ensuring efficient use of resources.
Inspections and Approvals
Granite conducts inspections, embodying transparency and accountability, before each fund release to verify the progress, which is a critical step in the construction loan process.
Title and Lien Checks
To ensure a smooth and uninterrupted construction process, Granite performs regular title searches to prevent any lien-related issues that could arise during the project.
Interest Rate Float-Down and Other Financial Considerations
Rate Adaptability
The interest rate of the loan can potentially lower after construction if the market rates are favorable, offering a significant benefit for borrowers by reducing their overall loan costs.
Draw Schedule and Fees
A detailed draw schedule is established, along with various fees such as the construction management fee (for VA loans) and draw fees, which contribute to the smooth execution of the project and the financial management of VA construction loans.
Project and Builder Approval
For a project to be eligible for a One-Time Close Construction Loan, both the project approval and the builder approval must be secured through 719 Lending and Granite. This process ensures quality, compliance with all necessary standards, and adherence to relevant regulations.
Eligibility and Parameters for One-Time Close Construction Loan
Conventional and VA Loans
The program accommodates both conventional and VA loans, with specific parameters for each.
Property Types and Restrictions
Certain property types, like co-ops and manufactured homes, are ineligible for this loan.
Loan Structure
The loan is structured to transition seamlessly from construction to permanent financing.
Conclusion: Realize Your Dream Home with One-Time Close Construction Loan
The One-Time Close Construction Loan by 719 Lending offers a comprehensive and borrower-friendly solution for constructing your dream home, targeting both homebuyers and builders in Colorado Springs. By streamlining the financing process and offering competitive terms, it distinguishes itself as a top choice for those looking to build a new home.
For more insights into Colorado Springs real estate and finance, visit 719lending.com. Start your journey to your dream home today! Contact us to learn more about how a One-Time Close Construction Loan can work for you.
Disclaimer:This article is intended for informational purposes only and should not be considered as financial advice. Always consult with a financial advisor before making any major financial decisions to ensure you are making the best choices for your financial future.
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