There are many types of loans to consider when funding your dream home. If you’re looking to build your own home, then you’ll want to consider a One-Time Close Loan with New American Funding.
This option allows you to purchase the property, pay for the new construction, and secure the mortgage with one single loan.
There are many benefits to choosing this program, including ease of securing the loan, potential cost-saving advantages, and loan payment options. NAF offers a lot of flexibility with this type of loan as well.
What Are The Benefits
A One-Time Close Loan is not only beneficial, but it’s also a flexible option for a borrower who needs down-payment flexibility and loan options.
Some benefits of a One-Time Close Loan include:
- A One-Time Close Loan, in some cases, is a more simplified process - borrowers only have to go through one loan application and one closing instead of two. A borrower will fill out a standard loan application, including financial and credit information. Then a lender, like NAF, would determine the loan amount, interest rate, and other terms. Going through this process only once saves time and money as you prepare for your new build.
- Potentially lower closing costs - The borrower will pay fees to many service providers, not just the mortgage company. They include one-time payments or ongoing payments (like insurance and taxes). The borrower saves costs by paying fees for just one closing loan instead of two.
- Borrowers can lock in an interest rate before construction begins – By using a fixed-rate mortgage borrowers can potentially avoid the future stress of a changing interest rate. The borrower's credit score, loan amount, and down payment will be one determiner of the interest rate. Rates tend to fluctuate based on the economy and policies. Because of these variables, it’s not only financially advantageous to lock in an ideal interest rate early on, but it also gives you peace of mind as you begin building your home.
- Interest-only payments during the building process - An interest-only payment means the borrower pays just the interest charged for borrowing the money. After a certain period, payments towards paying off the principal loan begin. Interest-only payment is an excellent option for borrowers wanting to save costs early on.
How NAF’s Program Benefits The Borrower
NAF will customize the program by helping choose the right loan for the borrower. Because credit scores are essential in a One-Time Close Loan, NAF works with the borrower’s unique situation to decide if an FHA, Conventional, or VA loan is the best option. We also advise on techniques to effectively and quickly raise the credit score by paying bills on time, fixing errors on a credit report, and other strategies.
Another exciting way NAF keeps the program flexible is by providing down payment options. In a One-Time Close Loan, down payment requirements can be slightly higher. To help the borrower, in some cases, NAF allows gifts or land equity to cover costs. Those gifts or the land could be used as collateral to help protect the down payment. We also have down payment assistance programs to help as well.
NAF wants to see you in your dream home, so we keep the builders and contractors on schedule. We communicate directly with the construction point person, set a construction schedule, and monitor the process every step of the way. We release funds as the construction progresses to incentivize the team. We aim to keep building on track to ensure you settle into your new home during the expected time frame (typically six months to a year or more, depending on the project scope).
One-Time Close Loans is a slightly different process, but with NAF, we help you every step of the way.
How NAF Gives You a Peace of Mind During Construction
The process of securing a One-Time Close Loan is different from a typical loan because the construction is a part of the package. For this reason, NAF makes it a priority to help the borrower during the construction phase by approving the construction team and maintaining quality control.
Because NAF wants the construction process to go smoothly and according to the borrower's plans, we require that the construction team be certified. That way, we can ensure the work is quality and on par with the borrower’s expectations. Throughout the build process, the builder will send updates to NAF, and an inspector might even go to the site to verify that the work is up to the highest standards.
NAF will also divide out the loan funds strategically versus paying it up front as in other types of loans. In a One-Time Close Loan, NAF would release funds throughout the stages of approved construction. Divvying out the money in this way allows for more control over the construction process and helps ensure the project stays on track so the borrower can move into their new home on time.
Choosing NAF and The Right Loan
One-Time Close Loans are more complex than traditional mortgages, so it’s essential to find a lender like NAF with extensive experience working with this type of loan. This loan sometimes requires strategic structuring to suit a borrower's needs and to navigate potential issues. Not only is NAF an experienced lender, but we also offer initiatives to help you and, in some cases, quick-close options to get the build off the ground faster.
The One-Time Close Loan is an excellent package for borrowers looking for mortgages and building loans. The simplified process, the potentially lower fees in closing costs, the interest-only payments, and the locked interest rates are a few aspects of this loan that make it a desirable option. NAF also is by the borrower’s side every step of the way and helps explicitly during the construction phase to ensure that you are ready to move into your dream home on time.
Contact us to learn more about how our loan officers can assist you in securing a One-Time Close Loan.