What is a New Construction Loan?
Also known as a One-Time Close loan
A One-Time Close (OTC) loan is a product that allows borrowers to combine financing for a lot purchase, construction and permanent mortgage into one first mortgage loan. Ideally suited for borrowers who are purchasing new construction, the OTC loan offers the benefits of low money down financing, competitive interest rates and one closing for all financing.
A construction loan will include things such as:
- Construction draws
- Title updates
- Any necessary loan modifications
- Construction underwriting
- Construction closing coordination
When you apply for a loan to build a home, the lender doesn’t have a complete home as collateral, so qualifying for a loan can be more difficult. The lender will want details about the home’s size, the materials used and the contractors and subcontractors who do the work. The general contractor can pull all this information together.
On top of that, the lender needs to know that you can make your monthly loan payments during construction. If the lender thinks you can’t make your current rent or mortgage payments while your house is being built, you won’t qualify.
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CFG is owned and operated by Proud Veterans, military family members and supporters of our Great Armed Forces. We have extensive experience with the loan process and are here to support you every step of the way.