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Information on Construction to Permanent Loans                                                                                                     

Carteret Mortgage Company has expanded its “One Time Close Construction to Permanent Loan” offering. These programs 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 mortgage broker and represent 18 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 here 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”

 This page is focused on new construction, if you are interested in renovating an existing home please go to my construction loans page.

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 Construction Loans include:

  • One Time Close Construction to Permanent Single Rate. "One Step" program which protects you against increasing rates and extended lock fees. Interest only fixed rate during construction and modifies into a permanent loan after construction. Great flexibility and low rates on ARMs.

  • One Time Close Construction to Permanent Prime Rate Based. "Two Step" program allows you to borrow up to 95% of your total cost for a Principal Residence and up to 90% on a Vacation Home. Based on the Prime Rate  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 to permanent 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 to permanent 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 to permanent loan.

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

One of the questions I frequently get from my clients is about finding a qualified and reliable contractor. After a great deal of research, I do recommend Reliable Remodeler. I have personally used their free service and was very pleased with the outcome. Please complete their contractor referral form for up to 4 local pre screened contractors.

One final but important note. They are complex and are a specialized area of mortgage lending. I have many years of experience in them and in most years will close in excess of $3,000,000. As an experienced mortgage broker, I have access to most programs available today and will research the market for the program which makes the most sense for you. I prefer to analyze your goals and financial situation before I recommend a program but I will always make sure you clearly understand the options available to you. I stay with my clients from the beginning to the end of the project. If there is an issue with the lender, I will intercede on your behalf. I work for you, not the lender.

As a Certified Mortgage Planning Specialist, I offer an analysis of your situation today can make suggestions on how small changes in how your debt is structured today can have a life changing effect in the years to come.  Read more about this free, no obligation service.

I hope this page was useful to you. Please scroll down to view my Mortgage Market Guide. It is a weekly publication explaining the financial markets from a consumer's perspective that is available on this website or by email subscription. I have nearly 8,000 subscribers today and would be happy to have you as well. Your email address will never be used for any other purpose.

Information on Construction to Permanent Loans   Prequalify for your Construction to Permanent Loan. 

 

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Extensive consumer information on construction,remodeling, first time homebuyer,and no documentation mortgages.