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Construction Loans in Texas

One time close or a Two-time close construction loans? Which one is right for you? And what is the difference between the two?

Both One-time close and Two-time close construct to perm loans have their pros and cons, I will start with the One- time close.

One time close construction Pros:

· You only have to qualify once and you do not need to worry about closing twice.

· Once you are locked in and approved with a valid appraisal and clear title it’s a done deal.

· You will have only one closing.

One time close construction Cons:

· MI companies no longer want to insure One-time construction loans so you will have to come to the table with a 20% down payment.

· You will end up with an interest rate that is about .5% to 1% higher than the market rate.

· One time close construction loans are only available on the conventional side of the business and chances are you will not be approved unless you have a 720 to a 740 credit score and above.

Two time close construction loan Pros:

· You will end up with a better loan than if you were to go with a One-time close construction loan.

· You will have both Conventional and Government options for your final loan.

· Because of the government options for your permanent loan the credit requirements are lower than the One-time construction loan option.

· So long as you have a valid exit strategy for getting out of the actual interim loan you will be approved for the interim loan.

Two time close construction loan Cons:

· You will have 2 closings.

· Should something happen to your credit profile during the construction period your approval for the permanent loan could be impacted. (There are things the client can do to limit this risk)

This is an overall break down of the pros and cons involved in residential owner occupied construction lending for both One-time and Two-time close construction loans. There is obviously quite a bit more to it so please don’t be afraid to contact me directly. I limit the number of clientele I take one at a given time in order to provide better service so I am currently only taking on clients in Texas with estimated loan amounts of $200K or higher. Regardless of whether I can help you I hope the information I have provided is helpful.

For more information on construction lending please go to: www.yourloanofficer4life.com/constmoreinfo

Samuel Morales

www.yourloanofficer4life.com

Samuel@yourloanofficer4life.com

TSLD Lic: 56991