Build a Custom Home

Building Your Dream Home with a One-Time Close Construction Loan

Building a custom home is an exciting journey that allows you to design a space tailored to your lifestyle, needs, and personal taste. However, financing a custom build can seem complex—this is where a One-Time Close (OTC) construction loan comes in. This type of loan streamlines the financing process, making it easier and more cost-effective to bring your dream home to life.

What Is a One-Time Close Construction Loan?

A One-Time Close construction loan combines the construction financing and the permanent mortgage into a single loan. Unlike Two-Time Close construction loans that require separate approval processes for the build phase and the final mortgage, an OTC loan consolidates everything upfront into one single loan, offering a seamless transition from construction to homeownership.

The Benefits of a One-Time Close Construction Loan

1. Simplified Financing

With an OTC loan, you only have to apply once, reducing paperwork and eliminating the need for multiple approvals. This streamlined process saves time and effort, making the financing aspect of building a home much smoother.

2. Lower Closing Costs

Since there’s only one closing, you avoid paying multiple sets of fees associated with separate loans. This can result in substantial savings compared to traditional construction financing options.

3. Interest Rate Protection

An OTC loan locks in your interest rate at the start, ensuring stability and protection from potential market fluctuations. This is particularly beneficial in times of rising interest rates.

4. Easier Loan Management

With a traditional construction loan, you may have to refinance into a permanent mortgage at the end of the build, which can be a stressful and costly process. An OTC loan eliminates this step, automatically converting to a standard mortgage once construction is complete.

How the Mortgage and Draw Process Works

A key component of any construction loan is the draw process, which ensures that funds are released as needed throughout the building phase. Here’s a general breakdown of how it works:

1. Loan Approval & Closing – Once you’ve been approved and closed on your OTC loan, the initial funds will be available to start construction.
2. Construction Phase Begins – Your builder starts work, and funds are released in phases, known as draws, as various stages of the home’s construction are completed.
3. Draw Inspections – Before each draw is issued, an inspector evaluates the progress to ensure work is completed according to plan.
4. Final Draw & Mortgage Conversion – Once construction is finished and a final inspection is conducted, the loan automatically transitions into a permanent mortgage.

Is a One-Time Close Construction Loan Right for You?

If you’re looking for a financing option that simplifies the custom home-building process, an OTC construction loan is an excellent choice. It offers financial security, convenience, and cost savings, making it ideal for homeowners who want a hassle-free path to their dream home.

Building a custom home is an exciting and rewarding experience. By choosing a One-Time Close construction loan, you can focus on what matters most—creating a space that perfectly suits your vision, without the stress of navigating complex financing.

Are you ready to build your dream home? Let’s explore your options and take the first step toward homeownership on your terms!