Building your dream home in Newark, OH can be daunting. But there’s a way to make the process easier: single close construction loans. These loans combine construction and permanent financing into one loan. Here’s what they are, how they work and why you should consider.
A single close construction loan, also known as a construction-to-permanent loan, is a mortgage that finances the construction of your home and the long-term mortgage to pay for it after completion. Instead of having to get two separate loans for the construction and the mortgage, a single close loan combines both construction financing and a long-term home loan into one transaction, which means less paperwork, fewer fees and a simpler process.
A single close construction loan is a type of loan that allows homebuyers to finance both the construction of their new home and the long-term mortgage with a single loan. This streamlined process means you only have to go through one closing, significantly reducing the time and effort it takes to build and move into your new home. The loan process involves a single appraisal, loan originator, and closing process, making it much simpler than traditional methods.
Here’s a step-by-step look at how it works:
By consolidating these steps into a single loan, you can begin construction with confidence, knowing that your financing is secure from start to finish.
Newark is a growing community with a mix of suburban and rural living, rich history and strong community. If you’re building a home here a single close construction loan can offer:
Additionally, single close construction loans are accessible for low- and moderate-income buyers, emphasizing that these loans require lower down payments and lower credit scores compared to conventional loan options.
Traditional construction loans typically involve two separate loans: one for the construction phase and another for the permanent mortgage. This means you have to go through two separate closings, which can be both time-consuming and costly. Each closing comes with its own set of fees, paperwork, and potential delays.
In contrast, a single close construction loan combines the construction loan and permanent mortgage into a single loan. This eliminates the need for two separate closings, reducing both the time and cost associated with traditional construction loans. With a single close construction loan, you benefit from a streamlined process, fewer fees, and the convenience of managing just one loan.
Qualifying for a single close construction loan is similar to qualifying for any other loan. Lenders will look at:
The Federal Housing Administration (FHA) and the Department of Veterans Affairs (VA) offer government-backed loan options for single close construction loans, providing more lenient credit score requirements and lower down payment options.
The FHA One-Time Close Loan is a government-backed loan that combines a construction loan and permanent mortgage into a single loan. This loan requires a minimum down payment of 3.5% and a minimum credit score of 580, making it accessible to many borrowers.
The VA One-Time Close Loan is designed for veterans, servicemembers, and eligible military associates. This loan offers zero down payment options and more lenient credit score requirements, making it an excellent choice for those who have served our country.
Homebuyers in Newark, OH, may be eligible for local loan options that offer more favorable terms and conditions. The Licking County Transit and the City of Newark provide various loan programs and incentives for homebuyers.
The Licking County Transit offers a loan program that provides financing for homebuyers who purchase homes in Licking County. This program features competitive interest rates and flexible repayment terms, making it an attractive option for local residents.
The City of Newark also offers a loan program that provides financing for homebuyers within the city. Similar to the Licking County program, it offers competitive interest rates and flexible repayment terms, helping to make homeownership more accessible for Newark residents.
Building a home on your own lot can be a cost-effective and efficient way to create your dream home. With a single close construction loan, you can finance both the construction of your new home and the land purchase (if necessary) with a single loan.
The process typically involves the following steps:
In Newark, OH there are several single close construction loan options:
Choosing the right lender is crucial to a successful home building project. Look for a lender who has experience with construction loans and can guide you through the process. As a seasoned mortgage expert in new construction financing I, Bob Fabian, can help you build your dream home in Newark, OH. Whether it’s your first home or forever home I can help you navigate the loan process, lock in a great rate and keep your project on track financially.
Building a home in Newark, OH is fun and financing doesn’t have to be hard. With a single close construction loan you can simplify the process, save money and get the funds you need with one application and one closing. By working with an experienced lender, you’ll have peace of mind knowing your home’s financing is taken care of so you can focus on building your dream home. Ready to get started or have questions about single close construction loans? Reach out today!
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