You’ve made the decision: You are going to build a new home. What an exciting journey you have ahead of you! If you’re new to the process, you might be wondering how to finance land and a new home at the same time. You won’t apply for the typical mortgage loan that most people are familiar with, but your course of action will be similar.
As you might expect, you’ll need to buy land before you begin building your new home, but this doesn’t mean you should draw the process out. There’s no point in buying land and letting interest accrue on a loan while you figure out what your next steps are. Be ready to pull the trigger—shop around for the perfect plot of land and the best builder in your area at the same time.
How easy would it be if you could finance both your land and the construction of your home at the same time? You can! Detailed below is the best way to bundle your land and home financing process to simplify your new home construction.
Bundle the Financing With a One-Time Close Loan
Thinking about the process of building and financing your new home in multiple phases makes the process seem more daunting. Thankfully, the process of financing the building of your new home, as well as your permanent mortgage payments, can now be accomplished with one loan: the One-Time Close loan.
Also called the Construction-to-Permanent loan and All-in-One loan, this kind of loan was made for homebuilders like you. The One-Time Close loan makes it possible for your lot purchase, construction costs, and permanent mortgage to be financed with one loan. You’ll only have to go through the application and approval process one time!
Other benefits of this kind of loan include:
- Interest-only payments while construction is going on
- No prepayment penalties
- Fixed construction interest rate for 12 months (typically)
- Security of having permanent financing and locking a rate at your first and only close
Being able to finance your land, construction of your new home, as well as your permanent mortgage payments in one fell swoop can help speed up the financing process as well as cut down the costs of financing your new home.
You can still choose from a variety of fixed or adjustable-rate programs, and you will only have to pay closing costs once for your lot, construction, and permanent mortgage! Keep in mind that this kind of loan is only available in conjunction with permanent financing.
The One-Time Close loan simplifies your lending process, and working with the right new home builder can make the process even smoother and ensure your happiness with your new home.
If you’re looking for a reliable new home builder, contact Build On Your Land today. We can answer any further financing questions you have! We look forward to helping you start construction on your next home.