MEET ANDREW AND ASHLEY
- Just starting and want to use VA eligibility to purchase a manufactured home
- They need it done within six months before their baby arrives
- They have some money saved but want to use it toward the expenses for the baby rather than a down payment
- They are hoping to have a lower payment than what they are paying in rent
What is a Construction Loan?
A short-term loan is used to finance the cost of building a home. Either the builder or home buyer takes out a construction loan to cover the costs of buying the land and constructing the home. Upon completion, the home refinances into a permanent mortgage. Here at Major Mortgage, we have two options, a one-time close loan or two-time close financing. The OTC (One Time Close) loan gives the home buyer the ability to finance the land, and construction in a term of 6 months or less, and then that loan is converted to permanent financing. The two-time close financing is exactly as it sounds. The loan closing will finance the purchase of the land and construction in a term of 12 months or less. At the completion of construction, we refinance the construction loan to permanent financing. Both loans are underwritten and approved prior to the close of the construction loan.
Construction Loan Key Takeaways:
- Minimum down payment as low as 0 to 5% (varies per loan type)
- No mortgage insurance during the construction phase
Other requirements and conditions apply
Construction Loan might be right for you if:
- You want the opportunity to build a new rather than purchase an existing home
- You’re looking to build a Manufactured, Modular, or Stick-built construction home