Construction loan to mortgage

How do you convert your construction loan to a mortgage? Now […]

Construction loan to mortgage

Posted on: November 10, 2020

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How do you convert your construction loan to a mortgage? Now that you are almost finished building your dream home, suddenly you find yourself in a financial jam, and it looks like you can't fulfill your obligations to your construction loan lender. This is an all too real scenario that has been happening in the country, a scenario that could have been avoided if you applied for a one-time close mortgage.  One-time close is an advantageous deal because you will not be caught unaware of the sudden interest rate changes.  You only deal with one lender, and because of that, you can get an even better deal in terms of the interest rates that you will be getting, among other things. But if applying for a one-time close construction loan is not on the table anymore, you can still find a solution to the challenges you are facing now. You can talk to the lender of your standard construction loan and ask how you can convert it to a standard residential mortgage even before your complete building your home. You may not get the same rate as the construction loan, but if you borrow from the same lender, they might be swayed to give you a better deal. Another benefit of getting a one-time close is that you will save yourself the hassle of applying for two kinds of loans. Because your construction loan will be treated separately from your mortgage, you need to prepare two sets of documents, two sets of applications, and double of everything required of you.  As mentioned earlier, the deal you get from your lender (especially if it will be two separate lending institutions) might not be the same. Save yourself the hassle of looking for ways to convert your construction loan to mortgage and apply for a one-time-close in the beginning. Let us know how we can help you.  

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