Obtaining a construction loan to build your very own custom home from the ground up is a little different than using a traditional mortgage to buy an existing home. Luckily for you, PrimeLending home loan experts will be by your side every step of our streamlined two-step construction loan process.
Two Closings = Savings
You might be asking yourself, “Why do I need to close twice?” or thinking, “That sounds complicated.” So, let us put your mind at ease. A new-construction loan from PrimeLending is all about providing the flexibility you need and helping you save money in the long run. With our two-step close process, you will save time, money and stress. And our experienced construction loan experts will walk you through every step, making your process a lot simpler than you think.
First, you get a temporary loan with a fixed rate to start the project and fund the physical construction of your home. With a PrimeLending construction loan, you could pay as little as 10% down, and no mortgage insurance is required for this loan. This first loan will span somewhere between nine to 12 months for construction to be completed. During construction, you can lock your interest rate anytime (up to 360 days in advance of completion).
Once construction is complete, we’ll refinance your initial loan into a traditional mortgage at the most favorable terms possible. Because investors have a lower risk on a two-time close mortgage, you can often secure lower interest rates on a two-time close construction loan than one-time close options are able to offer. At the second closing, you can also utilize closing cost credits for a low or no-cost refinance; your loan officer will be able to tell you just how much you will save.
Only Move Once
One of the reasons our construction loans are so popular is borrowers can often save time, money and energy by only having to move once!
During construction, you will make interest-only payments on your temporary loan, and you will only pay interest on the funds that have been disbursed to the builder/contractor along the way. This will make your payments during construction as low as possible.
For most customers, this lower payment, along with expert guidance from our experienced loan officers, can make the difference between moving twice and only moving one time. Ask your loan officer how to obtain a “market rent analysis” which aids in qualifying for your new construction mortgage with your existing mortgage. Once you close on your new construction loan, you would then start working with your real estate agent to begin the selling/leasing process. Many customers can sell their existing home after the new home is built, so they only have to move once.
Finance Your New Construction Dream Home
From deciding where to put light switches to picking out colors and appliances, you’ll have plenty to think about. So, your PrimeLending loan officer will take any concerns about financing off your mind. We assure fast, efficient closings and hassle-free document collection and submissions. We also promise to support and keep you informed throughout the entire loan process. Every step of the way.
Ready to get started? Connect with a PrimeLending Loan Officer to get the information you’re searching for.