One Time Close Construction Loans

One-Time Close Construction Loans Streamline Financing for Your Home

Building a custom home is an exciting journey, and financing it shouldn’t add unnecessary stress. Traditional construction financing often requires two separate closings: one for the construction loan and another for the permanent mortgage. However, with a One-Time Close Construction Loan, you can finance the land, construction, and your permanent mortgage all with a single application and one closing. At MAK Mortgage Solutions, we specialize in providing these streamlined single close construction mortgages, making your dream home build easier and more affordable.

What is a One-Time Close Construction Loan?

A One-Time Close (OTC) Construction Loan (also known as a Single Close Construction Loan) is a mortgage product that combines the financing for the construction phase and the long-term, permanent mortgage into one loan with a single closing. This means you avoid the hassle and duplicate costs (like second appraisals, title searches, and closing fees) associated with two separate loan processes.

Key Benefits of One-Time Close Construction Loans:

• Single Closing: The biggest advantage! You only go through the closing process once, saving you significant time, money, and paperwork.
• Reduced Costs: Avoid paying two sets of closing costs and fees, which can amount to substantial savings.
• Rate Lock: In many cases, you can lock in your interest rate for the permanent mortgage before construction even begins, protecting you from rising rates during the build phase.
• Seamless Transition: Once construction is complete, the loan automatically converts from the construction phase to the permanent mortgage without any additional underwriting or re-qualification.
• Simplicity & Convenience: A less complicated process means less stress for you as you focus on building your new home.
• Finance Land & Build: These loans can often include the cost of purchasing the land if you don’t already own it, providing comprehensive financing.

How One-Time Close Construction Loans Work:

During the construction phase, funds are disbursed in draws to your builder as construction milestones are met and inspected. You typically only pay interest on the money drawn. Once your home is complete and a Certificate of Occupancy is issued, the loan automatically converts to your permanent mortgage with principal and interest payments beginning.

Is a One-Time Close Construction Loan Right for You?

One-Time Close Construction Loans are generally ideal for:

• Individuals or families planning to build a new primary residence.
• Those who value simplicity and want to minimize paperwork and closing costs.
• Borrowers who want to lock in their interest rate early in the process.
• Customers who have a clear vision for their custom home and a reputable builder.

Program Options for One-Time Close:

Depending on your eligibility, One-Time Close options may include:

• FHA One-Time Close: Backed by the FHA, offering lower down payments and flexible credit requirements.
• VA One-Time Close: For eligible veterans, offering 100% financing and no PMI.
• Conventional One-Time Close: Available for well-qualified borrowers, often with higher loan limits.