We own a lot outside of Houston and have plans to build on it in the very near future. We are shopping construction loans right now and the initial lender that we spoke with only offers a traditional construction loan that we would close on up front and then have to go through a second closing when we secure permanent financing when the home is complete.

I have heard about a single close construction loan that converts to permanent financing at the end. Is there anyone on here that is familiar with this type of construction loan? The lender I spoke with initially said that fewer companies offer this type of loan.

Other than less closing costs would there be an advantage to using a single close? Are there any other differences in down payments needed that I would need to be aware of? We intend to use our lot as our primary source of down payment.

I would love to speak with someone who has experience with this.

Thanks guys. I appreciate your help!

There are several of use who have the one time close option. I have a 30 year fixed. Jja79, Deats, Jay are posters as well

My contact info is in my profile

I'd love to have the opportunity to speak with you. I"m in Houston and my email is on my profile. This is a big part of our business. We have more than 400 houses under construction we're financing.

Here are the advantages I see to a one time close.

Rates for qualifying borrowers generally are in the 3's, interest only for construction.

Any change in the rate environment, your job status (say you change from W2 to 1099), your credit rating or the property value have no effect. Your permanent mortgage has closed prior to commencement of construction.

The fact that you qualified for the construction loan does not ensure you will qualify for the permanent mortgage as they are independent transactions.

When the house is complete you won't be packing up to move and having to find your documents to qualify for a new mortgage - your mortgage already closed.

You save the second set of closing costs.

There is no prepayment penalty so if the rate environment is favorable you have not relinquished the right to refinance if that's your preference.

Thanks jja79. Sorry but when I look at your profile it only tells me when you joined and your number of posts. Can you give me your number? I'd like to chat this afternoon if you have time. Thanks.

832 606 2117

this may be relevant to my interests in the near future.