Start Building Your Dream With a New Construction Loan in Weatherford, TX

A one-time close construction loan for new construction homes and barndominiums can streamline the financing process for your dream home. Here's a breakdown of the typical steps involved:

Pre-Loan:

1. Get Pre-Approved: Before diving into specifics, get pre-approved for a loan to solidify your budget and borrowing power. This involves submitting financial documents and undergoing a credit check.

2. Land and Builder: Secure your piece of land and choose a licensed/qualified builder experienced with one-time close loans. Ensure your chosen builder meets the lender's requirements.

3. Detailed Plans and Budget: Finalize your construction plans and establish a detailed budget with your builder. This is crucial for securing loan approval and managing disbursements.

Loan Application and Approval:

1. Loan Application: Submit a formal loan application with your chosen lender. This will likely involve additional documentation regarding your builder, plans, budget, and land ownership.

2. Appraisal and Inspections: The lender will order an appraisal of the land and potentially inspections of the builder's work during key construction stages.

3. Loan Approval and Closing: If everything meets the lender's criteria, your loan will be approved, and you'll have a single loan closing. You'll sign both the construction loan and permanent mortgage documents at this stage.

Construction and Loan Disbursement:

1. Construction Draw Schedule: You and your builder will establish a schedule for disbursing loan funds based on construction progress milestones. Keep in mind there are costs associated to these draws so it’s important to be efficient with your requests.

2. Draw Requests and Inspections: Your builder will submit draw requests to the lender at each milestone, accompanied by verification of completed work. The lender will approve or deny these requests based on inspections and compliance with the schedule.

3. Interest-Only Payments: During construction, you'll typically only pay interest on the disbursed loan amount. This is usually going to be slightly higher than your locked rate during the construction period.

Completion and Transition to Permanent Mortgage:

1. Final Inspection and Appraisal: Upon completion, the lender will conduct a final inspection and potentially another appraisal to confirm the new home's value meets expectations.

2. Permanent Mortgage Conversion: Once everything is approved, the construction loan automatically converts to a permanent mortgage with fixed monthly payments (principal and interest).

Benefits of One-Time Close:

• Streamlined Process: Only one application and closing, saving time and reducing paperwork.

• Fixed Interest Rate: Lock in a fixed rate throughout the entire process, providing stability.

• Simplified Payment Transition: Seamless transition from interest-only payments to regular mortgage payments.

Things to Consider:

• Qualifying Requirements: These loans often have stricter qualification requirements like higher credit scores and larger down payments than traditional mortgages. Typically, 680 or higher.

• Builder Choice: Your builder must be familiar and approved for one-time close loans.

• Detailed Planning: Precise plans and budget are crucial to avoid project delays and funding issues.

Remember, this is a general overview, and specific details may vary. We recommend consulting with a Pure Funding mortgage professional specializing in one-time close construction loans to discuss your specific needs and get personalized guidance throughout the process.