What is a Single Close Construction Loan

Building in Florida can be fun but complicated. One way to make the process easier is with a Single Close Construction Loan. This loan combines the construction financing and the permanent mortgage into one loan, so you don’t have to go through multiple closings. Let’s dive into single close construction loans in Florida and why Bob Fabian is the guy to call for this type of financing.

What is a Single Close Construction Loan?

A single close construction loan, also known as a one-time close construction loan, is a loan that combines the construction loan and the permanent loan into one loan. No two separate loans, no two closings.

One Closing: One closing with single close construction loans, saves you time and reduces closing costs.

Fixed Interest Rate: Many single close construction loans have fixed interest rates, so you have financial stability throughout construction and repayment.

Easier Process: Combining the construction and permanent loan makes the loan process simpler for the borrower.

Cost Savings: Since there’s only one closing, borrowers save on closing costs which can be significant when dealing with two loans.

Why Choose Bob Fabian for Your Single Close Construction Loan in Florida?

Bob Fabian is a Home Loan Advisor with GO Mortgage and has been in new construction financing for years. Here’s why you should choose Bob for your single close construction loan in Florida:

Construction Loan Expert: Bob has been doing construction loans for years so the process is smooth and efficient.

Personalized Service: Bob will give you personalized advice and guidance to help you through the construction financing process.

Local Knowledge: Based in Florida, Bob knows the local market and can give you local insights and solutions.

Proven Results: Bob has a proven track record of getting clients construction financing so your project gets completed on time and on budget.

The construction phase is the most important part of the building process. With a single close construction loan, the lender will disburse funds in stages, called draws, to the builder based on the progress of the construction. This way the project stays on track and on budget. The borrower will make interest only payments during this phase which can ease the financial burden while the home is being built.

Loan Programs for Single Close Construction Loans

There are various loan programs for single close construction loans including conventional loans, FHA loans and VA loans. Each loan program has its own requirements and benefits:

Conventional Loans: For borrowers with good credit and stable income.

FHA Loans: Government-backed loans with more flexible credit and down payment requirements. FHA loans, backed by the Federal Housing Administration, offer more flexible credit and down payment requirements, making it easier for individuals with less-than-perfect credit to secure financing for building homes.

VA Loans: For eligible veterans and active-duty service members, often no down payment required.

To qualify for a single close construction loan you must:

Credit Score: A minimum credit score is required, usually around 640 for most programs. Higher scores can get better rates.

Income Verification: Borrower must provide proof of income and employment stability.

Down Payment: 0-5% down payment may be required depending on the loan type. FHA loans require 3.5% down and VA loans may not require any down payment for qualified veterans.

Closing Costs

Closing costs for single close construction loans can vary but typically include appraisal fees, inspection fees and legal fees. By rolling these costs into one close, borrowers save money and simplify the financing process. Since these costs are only paid once, there’s a big savings compared to managing two separate loans.

The general contractor is a key player in the construction process. They will get the building permits, manage the subcontractors and ensure the project is on time and on budget. Choosing the right contractor is critical to the success of your home construction project. Bob Fabian works with experienced contractors to make sure they meet the lender’s requirements and standards.

The Process

The process for a single close construction loan is:

Loan Application: Submit your loan application with required documents.

Approval and Underwriting: Lender reviews your application and verifies your eligibility.

Construction Phase: Lender disburses funds to the builder in stages based on construction milestones.

Final Inspection: Lender does a final inspection to make sure the home meets all requirements.

Permanent Loan: Loan converts to a permanent mortgage and payments start.

When you choose a single close construction loan you can choose fixed rate or adjustable rate. Fixed rate loans have stable interest rates and predictable monthly payments while adjustable rate loans may have lower rates that can change over time. Bob Fabian can help you decide which one is best for your situation and long term goals.

Interest Rates

Interest rates for single close construction loans can vary based on credit score, loan type and market conditions. Locking in a fixed interest rate can give you financial stability during construction and repayment. It’s important to discuss interest rate options with your lender to understand how it will affect your monthly payments and total loan cost.

An escrow account is used to hold funds for property taxes and insurance. For single close construction loans an escrow account will manage these expenses for you so you have peace of mind. This account will also manage the disbursement of funds during the construction phase so the builder gets paid on time.

Building Permits and Final Inspection

Getting building permits and passing final inspection are critical steps in the construction process. These will ensure your new home meets local building codes and standards. Bob Fabian and his team will help you coordinate with the general contractor and local authorities to get all necessary permits and schedule inspections so your project can move forward without delays.

Managing a construction project requires planning and supervision. Bob Fabian works with borrowers and builders to keep the construction phase on schedule and on budget. Regular updates and open communication will identify and resolve any issues that may arise so you don’t get stuck with costly delays and the final product meets your expectations.

Permanent Loan Conversion

Once the construction phase is complete the loan converts to a permanent mortgage. This is seamless with a single close construction loan since there’s no need for a second loan or additional closing. The borrower starts making regular mortgage payments based on the terms agreed upon during the initial loan approval.

Building a home in Florida has its own unique challenges like weather and specific building codes. Key locations like West Palm Beach offer unique opportunities for potential homeowners looking to build in these densely populated areas. Bob Fabian’s local knowledge will prepare you for these. From understanding hurricane impact to Florida building standards Bob can guide you through it all.

Lender’s Role

The lender plays a big role in the single close construction loan process. They not only provide the funding but also make sure the project meets the agreed terms. Regular inspections and progress reports will manage the disbursement of funds and make sure the construction is on track. Bob Fabian’s experience with GO Mortgage will give you the support and oversight you need for a successful project.

Summary: Work with Bob Fabian

Building a home in Florida is a big investment and securing the right financing is key. A single close construction loan has many benefits, a simplified process, cost savings and financial stability. With Bob Fabian’s expertise and personal service you can feel confident in the construction financing process and build your dream home in Florida.

Contact Bob Fabian at GO Mortgage for more information or to get started on your single close construction loan. Bob will help you achieve your homeownership goals with custom solutions and guidance.

Below is a compilation of frequently asked questions regarding single close construction loans. These questions cover various aspects of the loan process, eligibility requirements, benefits, and other key details. Familiarizing yourself with these commonly asked questions can help you gain a better understanding of single close construction loans and make informed decisions when considering this financing option.