One-Time Close Construction Loans In Arizona

A construction loan is short-term financing for constructing a new home or other real estate project. It covers building expenditures, such as land acquisition, labor, supplies, permits, and additional construction-related charges. Builders or buyers who custom-build their homes typically take out construction loans.

These are the primary characteristics of a construction loan:

• Short-term loan: Typically, construction loans are short-term loans with terms of one year or less. They are intended to capture the project’s construction phase.
• The interest rates on construction loans are typically higher than those on conventional mortgage loans. Due to the uncertainty and potential cost overruns associated with the construction process, these projects are deemed riskier.
• The loan amount is typically disbursed in stages or “draws” as construction advances. The creditor submits requests for funds, and the lender releases the funds after verifying the achievement of particular construction milestones.
• After construction is complete, the creditor can either convert the construction loan into a permanent mortgage or refinish it to pay off the construction loan. This procedure permits the creditor to switch from short-term to long-term financing for a completed property.

What is a One-Time Close Construction Loan?

A one-time close construction loan in Arizona is explicitly designed to finance the construction of a new home. It is a single loan that incorporates the financing for the construction phase and the permanent mortgage into one closing, simplifying the borrower’s experience. The loan covers the cost of construction as well as the land purchase, if applicable, and seamlessly converts into a long-term mortgage once construction is complete.

Advantages of a One-Time Close Construction Loan

One-time close construction loans provide several benefits to borrowers who wish to build a new home or undertake a construction endeavor. Listed below are several advantages:

• Simplified Process

Borrowers go through a single loan closing process for both the construction period and the permanent mortgage with a one-time close construction loan. This simplified procedure eliminates the need for two closings, resulting in less paperwork and administrative chores.

• Cost Savings

Choosing a construction loan with a single closing could result in cost savings. Borrowers save on closing costs that would otherwise be incurred for multiple loan closings because there is only one loan closing. This can be especially beneficial for borrowers seeking to minimize upfront costs.

• Convenience

Borrowers can interact with a single lender throughout construction when they obtain a one-time close construction loan. They have a single point of contact for their financing requirements, making it easier for them to manage the loan and communicate effectively.

• Single Approval

With a one-time close loan, borrowers only need to undergo a single approval process instead of multiple procedures for separate construction and permanent loans. This streamlines the financing procedure and reduces the time and effort required for loan approval.

• Construction Expertise

The majority of lenders who offer one-time close construction loans are experts in construction financing. They understand construction projects’ unique requirements and challenges and can provide guidance and support throughout the process, ensuring borrowers have a more pleasant experience.

Apply for a One-Time Close Construction Loan in Arizona

Using Capital Home Mortgage for a one-time close construction loan in Arizona offers homebuyers numerous advantages. First, the one-time close feature simplifies the financing procedure by combining the construction loan and permanent mortgage into a single loan, thereby reducing documentation and administrative duties. Capital Home Mortgage offers low down payment options, low-interest rates, and flexible underwriting, making home ownership more accessible in a market with intense competition. Capital Home Mortgage facilitates a more streamlined and effective construction loan experience for homebuyers through a single closing and a dedicated team.

Call (480) 360-6650 to speak with one of our Construction Loan Specialists about your one-time close construction loan project.