- A construction-to-permanent is a type of construction loan that allows the borrower to fund his construction and his permanent closing with one closing.
- Each mortgage, a conventional or a construction-to-permanent mortgage, comes in fixed or variable rate types. Additionally, the term can range from 10 to 40 years.
- Most construction-to-permanent mortgages require the borrower to complete the construction within a set time frame, from six months to one year.
- A construction-to-permanent mortgage allows a borrower to lock in the rate at the start of construction. This protects the borrower from rising interest rates.
- A conventional mortgage may not allow a borrower to construct the residence, however, it allows a borrower to move in immediately after closing.
Significance
Types
Time Frame
Features
Considerations
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