Construction Loans
Construction loans finance the building of a new home. During the construction phase, borrowers are typically only required to make interest payments.
Loan Options
- One-Time Close Loan (Construction-to-Permanent): This is a seamless option where the construction loan automatically converts into a standard permanent mortgage upon completion. The key advantage is a single application and closing process, saving time and costs.
- Stand-Alone Construction Loan: This type is typically short-term (max one year) and may require a smaller down payment. However, it requires a separate refinance into a permanent loan once construction is finished.
Key Considerations
Since building a home carries more risk than buying an existing one, construction mortgages are often harder to get approved and carry higher interest rates. Also, stand-alone loans do not allow borrowers to lock their interest rate during construction, which can expose them to rate volatility. We work with specialized lending partners and guide borrowers throughout this complex process.
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