Construction-to-Permanent Loans: A One-Time Closing with Interest Rate Lock-in
Construction-to-permanent loans (also known as C2P loans) are a great option for buyers looking to work with luxury custom home builders in Richmond, VA. C2P loans are a type of mortgage that allows you to finance the construction of your home and then convert the loan into a traditional mortgage once the home is complete. This can be a great option for borrowers who want to avoid the hassle of having two separate loans.
One of the benefits of C2P loans is that they offer a one-time closing. This means that you only have to pay closing costs once, which can save you money. Additionally, C2P loans typically have interest rate lock-in, which means that your interest rate will be locked in at the time of closing and will not change over the life of the loan.
The application process for a C2P loan is like the application process for a traditional mortgage. However, there may be a few extra documents that you need to provide, such as a construction contract.
If you are considering a C2P loan, there are a few things you should keep in mind. First, C2P loans typically have higher interest rates than traditional mortgages. Second, C2P loans may have stricter requirements for borrower qualification.
Overall, C2P loans can be a good option for borrowers who want to finance the construction of their home and then convert the loan into a traditional mortgage. If you are considering a C2P loan, be sure to speak with a qualified mortgage lender to learn more about the benefits and drawbacks of this type of loan.
Here are some quick facts addressed in the video:
- One-time closing: You only have to pay closing costs once, which can save you money.
- Interest rate lock-in: Your interest rate will be locked in at the time of closing and will not change over the life of the loan.
- Flexible terms: C2P loans typically have more flexible terms than traditional mortgages, so you can customize the loan to fit your needs.
- Easy qualification: C2P loans may have less stringent qualification requirements than traditional mortgages, making them a good option for first-time home builders.
- Loan disbursements: During the construction phase loan is disbursed based on a percentage of completion.
If you have any questions about C2P loans, please contact Regina Sobey at Monarch Mortgage. Call (757) 903-6730 to reach John Flemming from AR Homes ® our luxury custom home builder in Richmond, VA to start your custom home journey.