One close construction loans are designed for individuals looking to build their primary residence. Here's how they work:

 

- Single Closing: With a one close construction loan, you'll have just one closing, combining both the construction and permanent financing into a single process.

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- Flexible Terms: These loans typically offer more flexibility in terms of down payment and credit requirements, making them accessible for many homeowners.

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- Interest-Only Payments: During the construction phase, you'll make interest-only payments, helping to manage your budget.

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- Smooth Transition: Once construction is complete, the loan transitions to a traditional mortgage, simplifying the financing process.

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Investment Properties: Two Close Construction Loan

For those interested in building an investment property, two close construction loans are a popular choice:

 

- Two Separate Closings: This option involves two separate closings, one for the construction phase and another for the permanent financing. The first loan covers the construction costs, while the second handles long-term financing.

 

- Higher Down Payment: Investment property loans often require a higher down payment and have stricter credit requirements compared to owner-occupied loans.

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- Rental Income Considered: Lenders may consider potential rental income when evaluating your eligibility for the loan.

 

- Earning Potential: Investment properties can offer significant earning potential through rental income and property appreciation.

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Builder Spec Homes: The Builder's Perspective

For builders, spec homes are those constructed without a buyer already in mind. Financing options for these properties are unique:

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- Speculative Construction Loans: Builders typically use speculative construction loans to fund the construction of spec homes.

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- Short-Term Financing: These loans are short-term, usually covering the construction phase.

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- Quick Turnaround: Once the home is sold, builders can repay the loan quickly, minimizing interest costs.

 

- Profit Potential: Builders often see spec homes as opportunities to showcase their craftsmanship and turn a profit.

 

Skyridge Lending: "Know Your Options"

Understanding the nuances of home construction loans can be challenging, but it's essential to make informed decisions about your home or investment property. Skyridge Lending is here to help you "Know Your Options." Our expert team can guide you through the complexities of construction loans, whether you're building your dream home, investing in property, or working on a builder spec project.