Construction-permanent loans are for buyers building a new home- they may or may not already own the land. The construction loan closes before construction comences with only 1 set of closing costs. The buyer may be purchasing the land from the builder or another seller. The property is transferred into the buyers name before construction begins. The buyer makes interest only payments during construction based on the amount the builder has “drawn”. When the home is complete, the loan “rolls” to permanent financing with a principle & interest payment at the same rate during the construction phase. The loan can be a fixed rate or adjustable rate conventional loan & can be obtained with as little as 5% down for very strong buyers. Construction terms vary from 4-12 months. These loans are for single family owner occupied properties.
End loans are for buyers building a new home but the builder is doing the construction financing. The loan closes when the home is complete. There are no payments during construction. The rate lock is from 4-12 months depending on when the builder estimates the completion of the home. These loans may be a fixed or adjustable rate conventional loan.
If you’re thinking about building or work with builders, call me for more information. I am a member of the NorthCoast Building Industry Association- a building & remodeling trade association for builders & those affiliated with the building industry in Lorain, Erie & Huron counties in Ohio. Check out the website- www.northcoastbia.com. I am also a board of directors member & treasurer of the Northcoast Building Industry Association. Membership in this association also gives us membership in the National Association of Homebuilders & the Ohio Home builders association.
I look forward to working with you on building your dream home!!