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Construction Loans
Financing from the Ground Up
If you're looking to build a home from the ground up and finance everything from the construction to the permanent loan, you've come to the right place. Our Construction-to-Permanent financing allows you to do just that.
The construction of a new home often requires financing and multiple closings. Not with Pacifica Mortgage. We'll finance the construction and permanent loan with one loan closing.
To help you get a better understanding of our construction-to-permanent financing programs; here are some of the more commonly asked questions.
What is construction-to-permanent financing?
A construction-to-permanent loan combines construction financing and permanent loan financing into a single loan transaction. There is one loan closing prior to the start of construction. At the completion of construction, the construction loan is modified into a permanent loan transaction.
What are the advantages of this type of financing?
This program allows you to finance the construction of your home, as well as the permanent loan, under one loan program. You only pay interest on the funds as they are disbursed. And the interest you pay during the construction period may be tax deductible.
On certain programs, you can lock in your Permanent Loan interest rate during the construction period and protect yourself from any future rate increases.
What types of properties are eligible?
Single-family detached homes that will be used as owner-occupied primary residences, or true second homes. This loan program is also available for manufactured housing as well.
What do I pay during construction?
You make interest-only monthly payments on the construction loan. Interest is paid only on the amount that has been disbursed at the time.
How are loan funds disbursed during construction?
All disbursements, "draws," will be disbursed based on a specific draw schedule determined prior to the loan closing. Most homes are built with 6 to 8 scheduled draws.
What choices do I have for my permanent loan?
You have the choice of a variety of programs including but, not limited to, a 30 or 15 year fixed rate, or an adjustable rate that has initial fixed rates for 10, 7, 5, or 3 years.
How long is the construction term?
The basic construction term will depend on the complexity of the home being built. Most construction terms will be for 6 to 12 months.
What happens at the end of the construction period?
When the construction is complete, you will sign a modification agreement. This will be based on the permanent loan program you choose. You will begin making principal and interest payments so that your loan will begin to amortize.
So if you're ready to build a house, call us. And ask how our different construction-to-permanent financing can make that house your home.
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