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Home loans for new construction                                                                                                     

Home Construction/Perm Loans

Carteret Mortgage Company has expanded its “One Time Close Construction-Permanent Loan” offering. These home loans for new construction allow you to purchase the lot, fund the construction of your single family home using a construction product combined with your permanent loan and close only one time, saving you a substantial amount of money in closing costs.

I am a home loans for new construction mortgage broker and represent 16 of the largest construction lenders in the market. As a broker, I work for my client and not the lender, taking the time to understand your situation and placing your loan with the lender whose programs most closely match your situation and needs. I am able to give you unbiased advice and support throughout the process. Construction lending is a specialized part of mortgage banking and most lenders or brokers do not have the experience to guide you through this complex process. I have attempted to give you some basic information in this paper but please do not hesitate to call to discuss your individual project. At the most fundamental level, construction lenders offer two types of product characterized by how they base interest rates during the construction phase. I will refer to these approaches as “One Step” and “Two Step”

If you have owned your lot for 1 year, or if you have documented "on site" improvements to the property, we may be able to use this equity to meet your down payment requirement or create an interest reserve account. Depending on the size of the interest reserve account, these funds may make some or all of your payments during the construction phase.

Several Home Loans for new Construction include:

  • 100% Construction/Perm Fixed Rate. 100% LTV. Buyer contributes 3% to the transaction for closing costs which can come from a gift, sale of assets, or grant. Maximum loan $300,700 and you must occupy the property. Requires "perfect" credit with a FICO score of 700. 

  • One Time Close Construction/Perm Prime Rate Based. Allows you to borrow up to 95% of your total cost for a Principal Residence and up to 80% on a Vacation Home. Based on the Prime Rate + 1% during the construction period with interest only collected on funds disbursed. Allows a 12 month construction phase. 

  • Lot Loans. Designed for those who found the perfect lot but are not ready to build. Low down payment loans available.

I have written a  newsletter covering construction/perm loans, and a construction FAQ is available.

I have a list of documentation needed to process your loan.

There is a new page detailing construction loan fees.

I have detailed information on extended interest rate locks with a float down option. 

I have a page on calculating mortgage qualification ratios.

I have included detailed Frequently Asked Questions and common misconceptions about the process of building your home with a construction/perm loan.

I have also included  information on the specialized areas of log home, modular home, or timber frame home financing

If you are not ready to build but have found the perfect lot. The new Purchase Plus Lot Loan can save you a great deal of money.