So, what exactly is a Single-Close Construction Loan?
This loan is used for when you’re building a new home and acts as two loans in one: your construction loan plus your mortgage once the house is finished. It’s nice because during construction, your builder is paid as bills are submitted and you pay interest only on what funds that have been used so far. Once construction is complete, the loan automatically switches over to your permanent financing at the same interest rate.
One big advantage of using this approach is that you pay closing costs just once. If you did a separate construction loan and then a mortgage, you would have closing costs both times. You need just 10% down, and if you already have equity in your lot that can be credited toward the down payment.
You will have one-on-one personal guidance throughout the process, including being available to answer your builder/contractor’s questions along the way to keep the process moving smoothly.