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Single Closing: |
One loan that will finance the purchase of your lot, the
construction costs and the permanent mortgage on your home. Only one set
of documents are executed, which eliminates duplication of closing
costs. Upon completion of the property, the loan is modified to reflect
the permanent mortgage terms. |
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Two Closing: |
A construction loan that will finance the purchase of
your lot and the construction costs of building your new home. A primary
mortgage will then pay the outstanding balance at the completion of
construction. Each loan requires the execution of documents and
corresponding closing costs. The interest rate of the mortgage is
"floating" during construction and cannot be locked until the home is
nearly complete. Although less desirable than a Single Closing in most
respects, a Two Closing transaction is often easier to use for
non-traditional borrowers, such as self-employed and stated income. |
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Interest Rate: |
The interest rate is fixed for the term of the
construction loan. The borrower may lock into the permanent loan rate
prior to home completion. Contact My Building Partner for current rates
and lock-in details. |
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Interest Billing: |
During the construction period, interest is charged on
the disbursed funds only. Statements are mailed the first of each month,
with payments due by the 15th of the month. In many cases, construction
interest can be rolled back into the construction loan. You will not be
charged any payments towards principal during construction. |
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Modification: |
(Single Close) When the construction is 100% complete,
the loan will be modified to reflect the permanent loan rate and terms.
At the modification closing, final disbursements will be made, lien
waivers collected and escrows established. |
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Down Payment: |
Some borrowers may be required to deposit a down
payment. This amount will be the difference between the total project
costs and the approved mortgage amount, if lower. Most borrowers will
not have a down payment requirement. My Building Partner has down
payment assistance funds for most borrowers that may not qualify for
100% financing. |
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Overages: |
The mortgage (permanent) loan is difficult to increase
once the loan has been closed. Any changes resulting in additional costs
will be paid directly by the borrower. Every effort should be used to
stick to the overall estimated budget developed with the help of My
Building Partner. |
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Property Type: |
Owner occupied single family properties. Traditional
construction, post-and-beam, or log homes all qualify. |
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Mortgage Types: |
My Building Partner offers a variety of 15, 20, 25, and
30 year fixed, along with many adjustable rate mortgage products at
competitive market rates. |
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Loan-to-Value: |
My Building Partner will determine the amount of your
construction loan based on the appraised value of the plans you intend
to build on the lot you have chosen as if the home were already built.
Construction loan up to 95%. Permanent loan up to 95%. |
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Sweat Equity: |
Sweat equity is most simply defined as the value of work
you have done yourself as if you had purchased it in the marketplace.
For example, if you install your own drywall, the market value of
$5000.00 that the average contractor would have charged should translate
into an increased equity position in your new home at completion. |
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Insurance: |
A home owner insurance policy with a Builder's Risk
insurance rider must be provided. My Building Partner can assist in
locating coverage to meet this requirement. |
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Draws: |
Draws may be requested periodically during construction
to pay for materials and completed work by subcontractors. Inspections
will be required prior to disbursements being made. All draw requests
must be submitted in writing and authorized by the borrower. Request
will be processed in a timely manner. My Building Partner typically
allocates two draw periods per month, during construction. |
