Working Process

Most people have dream about building the house of their own. The number one reason people don’t follow through with building their dream house is because they are overwhelmed with tackling such a large project. The secret to a positive experience in constructing a house, is understanding the  construction process and how a construction loan works.

How two time closed loan works:

• You apply for and receive approval for both your construction and permanent loans.
• As your builder completes each phase of construction, they submit a Draw Request, requesting reimbursement for expenses and materials for completed work.
• Lender sends an inspector to verify that the work is satisfactorily complete and then funds the draw.
• At the beginning of each month, lender calculate the total amount of draws taken, apply your interest rate, and send you an interest statement.
• As construction nears completion, you will deplete your construction loan, and will fund what remains of the project.
• You make your down payment by paying for the remaining construction with your own funds. 
• When construction is complete, lender "take out" the construction loan with your permanent loan and close the transaction into a permanent mortgage. 
• At this point your file is updated (a new credit report, new verification of income and deposits, and a new appraisal) and we close the transaction again. This process has a duplication of costs and efforts.

How one time close loan works:

• Provided you have your down payment and full closing costs ready and in-hand, or in the paid-for equity in your lot, a one time close makes great sense and saves you money.
• Once you have completed the steps in the Borrowers Checklist and apply for and receive approval for your loan, loan is closed one time.
• It combines both construction and permanent financing into one loan. 
• At that point, you pay all of your closing costs and your full down payment at closing.
• You only pay interest during the construction phase, and the compete-work/receive-draw process proceeds.
• Once your home is completed, inspected, and verified as finished, we simply modify your Note to the permanent financing choice you made at the onset of construction.

what ever option u choose the basic steps remain the same.

Here are the basic steps of the working process:

• Select a mortgage provider and get pre-approved
• Select a house plan and specifications
• Get bids or select a builder
• Complete loan application
• Countdown to closing
• Construction can begin
• Preparing for permanent financing

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