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Our construction-to-permanent program* allows you to combine your construction or renovation financing and permanent mortgage into one loan. Best of all, you'll save time and money with just one closing and one set of closing costs. Include the purchase of your lot in the financing or build on a lot you already own. Make interest-only payments during the construction phase. You’ll also benefit by being able to lock in your permanent mortgage interest rate before construction begins, giving you added protection against rising rates.
A Guide to Construction-to-Permanent Financing
Our guide will provide you with the basics of how our construction-to-permanent program works and break down the process for you step by step.
The application process for a construction-to-permanent (C/P) loan and traditional mortgage financing is very similar. The lender will review your income, assets, debts, and credit history as well as order an appraisal. When you apply for a C/P loan, however, you’ll also be asked to provide additional documentation related to the construction, such as the contract you’ve signed with the builder, the construction plans and specifications. The approval process might take a little longer because of the additional information that needs to be reviewed.
As your home is being built or renovated, you builder will periodically request funds from your lender to pay for completed work. Your lender will order an inspection to verify the work has been completed and will disburse money from your loan proceeds to the builder. These disbursements are called “construction draws.”
During the construction phase of your loan, you’ll be billed monthly for interest. The interest-only payment is calculated based on the amount of funds the lender has previously disbursed to your builder for completed work. Depending on the location of your property, you may also be required to pay a flood insurance premium with your interest payment. You won’t need to make any principal payments until after construction is completed and your loan moves to the permanent phase.
The application process for a construction-to-permanent (C/P) loan and traditional mortgage financing is very similar. The lender will review your income, assets, debts, and credit history as well as order an appraisal. When you apply for a C/P loan, however, you’ll also be asked to provide additional documentation related to the construction, such as the contract you’ve signed with the builder, the construction plans and specifications. The approval process might take a little longer because of the additional information that needs to be reviewed.
As your home is being built or renovated, you builder will periodically request funds from your lender to pay for completed work. Your lender will order an inspection to verify the work has been completed and will disburse money from your loan proceeds to the builder. These disbursements are called “construction draws.”
During the construction phase of your loan, you’ll be billed monthly for interest. The interest-only payment is calculated based on the amount of funds the lender has previously disbursed to your builder for completed work. Depending on the location of your property, you may also be required to pay a flood insurance premium with your interest payment. You won’t need to make any principal payments until after construction is completed and your loan moves to the permanent phase.
Find information about your existing mortgage account, payment options and ways to contact us. Customer Service Representatives are available Monday-Friday 8 a.m. to 8 p.m. ET at 1-800-234-6002.