March 29, 2021

Why take out 3 loans? Finance the land, construction & mortgage all in one

If you want to build a home from the ground up, you typically need to secure and purchase a lot and then construct a home on it. That would normally entail getting one loan for the land and construction and a second loan for the mortgage on the finished residence.

But you can save time and money by pursuing a construction-to-permanent loan. This option simplifies the financing process by providing one loan and one closing. Caveats apply, however. You may pay a higher interest rate. A larger down payment may be required. And your lender may have additional requirements and restrictions.

Determine if a construction-to-permanent loan is right for you by learning more about what’s involved. For more information, read my latest article for NextAdvisor, Time Magazine’s new website featuring personal finance content and tips, available here.