10/22/2026
Building a home sounds exciting, and also confusing. Here is how one loan can take you from empty lot to finished home. π
Let us talk about one time close loans ππ½
THE COMMON ASSUMPTION ππ½
Build a home and you need a construction loan, then a second mortgage when it is done, with a second closing and second set of costs. Not always.
WHAT A ONE TIME CLOSE LOAN IS ππ½
Often called a construction-to-permanent loan. One application. One closing. It covers the build and then becomes your regular mortgage.
PHASE 1, THE BUILD ππ½
The lender pays the builder in stages called draws, after the work is checked. This usually takes around a year. You may pay only interest during this time.
PHASE 2, THE CONVERSION ππ½
When the home is finished, the loan converts to a regular mortgage, often a 15 or 30 year term. Now principal and interest payments begin.
WHAT LENDERS TYPICALLY WANT ππ½
Detailed plans and a budget, a licensed builder, and an appraisal of what the home is expected to be worth when it is finished. Down payment and credit requirements vary.
ONE THING TO PLAN FOR ππ½
If costs run over the budget, the difference usually falls on the borrower. Build in a cushion.
One closing instead of two. That is the idea behind a one time close.
Marcus Eligan | Mortgage Experts | | NMLS #189199 | Equal Housing Opportunity
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