OVERVIEW:
One-Time Close New Construction gives you the opportunity to build your dream home. You can choose a builder or general contractor of your choice to work with. Below shows you an overview of the process for One-Time Close New Construction loans.
Start with a pre-qualification to help gain an understanding of your total financing amount. After establishing your financial capacity, the next course of action is to connect with a builder to start designing your own home. With a clear picture of the planned home design, the search for your ideal land (if you don’t already have it) becomes more straightforward. If you are looking to purchase land, connect with a real estate agent who can help you combine the financing for the purchase of the land and the construction costs into a one-time transaction.
You will need to take your general ideas to a local builder and discuss the details of your dream build. Upon deciding on a builder, the builder or contractor’s information must get lender approval.
The contractor needs to fill out the One-Time close packet and forms. The contractor’s construction history, references, background, credit and confirming their license and necessary insurance are all checked. This review is important to ensure the contractor is capable of completing the planned build. If the contractor meets all the pre-requisites, the contract will be approved, and the loan process can continue.
Once the contractor is approved, the following must be submitted for project approval:
Once the title has been recorded the initial draw will be sent to the contractor. Let the construction begin!
The Lender will oversee the entire construction process and review the following aspects including:
Upon completion of the construction project, the contractor will provide a Certificate of Completion. Once received a Final Inspection with an appraiser will be scheduled for a final walk through.
Upon passing the Final Inspection, you will sign final loan documents that authorize a final construction draw for your contractor to cover any outstanding costs. Any residual construction funds will be converted back into the loan. At this time the loan converts from an interest only to the standard principal and interest payments.