What is A Construction to Perm Loan

Описание: What is a Construction to Perm Loan?


Construction to permanent financing is a type of loan which provides financing for the purchase of a lot and the construction of a home on that lot. If you already own a lot, the loan can be used to finance just the home construction.

Keep in mind, you will close on the construction-to-permanent loan before construction begins. During the construction phase, the bank will disperse funds to the builder in what we call draws once the work is completed. Your lender will schedule inspections at each stage of construction prior to releasing funds. You will make interest-only payments on the funds that have been dispersed. That way the interest is not tacked on the loan when it is converted.

When construction is finished this loan automatically rolls over into a traditional mortgage without having to go through another closing process. This means you will only have to pay for one set of closing costs. It also allows you to lock in your permanent mortgage interest rate, so you will not have to worry about rising interest rates while your home is being built.

I work with lots of builders and lenders who are reputable and professional, and they offer a wide range of financing programs to help you through the entire process. So, if you're ready to start building your dream home, then click the link below, go to the Watkins Team RE website and register for a free consultation so we can get you started.

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