Articles in Category: Build On Own Land

March 11, 2021

FHA One Time Close Construction Loans Versus FHA Rehabilitation Mortgages

There are FHA home loans you can apply for that allow you to build or renovate existing construction. One type of home loan–one that lets you build instead of buying existing construction–is the FHA One-Time Close (OTC) construction loan. An alternative, known as the FHA 203(k) Rehabilitation mortgage and it is used to repair or renovate a home. One-Time Close construction loans and FHA 203(k) Rehab loans are similar–these two loans need approved builders to do the work, and they both require a minimum down payment unless you choose a VA or USDA OTC loan instead. One-Time Close Down Payment Rules FHA One-Time Close loans have a 3.5% down requirement for those with FICO scores within the qualifying range. Borrowers with lower credit scores may be required to put 10% | more...

March 3, 2021

Which Construction Loan Is Right For You?

By Joe Wallace

There is a kind of home loan called a One-Time Close construction loan that lets you build a home on your own lot. There are government-backed One-Time Close construction loans offered including a USDA version of the One-Time Close construction loan, a VA Loan allowing you to do the same thing, and an FHA One-Time Close construction loan. The One-Time Close mortgage features a single application and closing date for the entire process–compare that to construction loans that feature one application and one closing date for the construction phase plus a separate application and closing date for the purchase of the property once it has been built. This is NOT how the process works with the One-Time Close loan which makes this process easier for borrowers and lenders by eliminating | more...

FHA Construction Loan Rule Changes In 2021

March 2, 2021

One-Time Close Construction Loan Advice

By Bruce Reichstein

If the idea of building a home instead of buying somebody else’s property appeals to you, the One-Time Close construction loan allows you to build a home from the ground up on your own lot (or on land you buy in conjunction with the mortgage). Building a home with plans you approve has plenty of advantages, but it also requires some extra consideration. It’s not terribly complicated to anticipate some important factors associated with your construction loan but it does take some time to get the information you need to make the most informed choices possible for your new home. If you want to build a home on your own lot instead of buying an existing house, the FHA One-Time Close construction mortgage is an option you should seriously consider. | more...

Buy or Build a House On Your Own Lot in 2020

February 17, 2021

FHA One-Time Close Construction Loan Advice: Hiring A Builder

By Bruce Reichstein

If you want to build a dream home on your own lot instead of buying somebody else’s house, the One-Time Close construction mortgage is an option you should explore. These loans require you to hire a builder (more on that below) and this is a part of the process that can be a bit intimidating for some borrowers until they learn there are some basic steps to follow that will make your hiring process a lot more hassle-free. Why Hire A Builder? Why go thru the trouble to find a qualified and reputable contractor to do the construction work for you? Why doesn’t the borrower act as their own builder or hire friends and family to pitch in? The answer is simple. For a start, most borrowers likely don’t have | more...

Home Loans For Building On Your Own Land

February 3, 2021

One-Time Construction Loan Amortization: What You Need To Know Before You Sign

By Bruce Reichstein

The FHA One-Time Close construction loan allows you to have a house built to your specifications rather than buying an existing home. This loan, which also has a VA mortgage counterpart as well as a USDA version, gives borrowers the ability to choose a specific design instead of settling for one you aren’t as interested in. An One-Time Close loan, which is offered to first-time home buyers and experienced home owners alike, provides the means for you to build on your own lot. You can also choose to purchase land with the loan funds as well as building the home. One Time Close loans can take longer depending on how fast the construction phase of the loan goes, but the ability to approve the design and features of the home | more...

January 28, 2021

Low FHA Mortgage Rates In 2021

By Joe Wallace

January of 2021 brought some anticipation about what might happen with home loan interest rates. Would conditions become less volatile and more stable? Would rates start to rise along with investor certainty in the markets that influence mortgage rates? Does fear and uncertainty persist in the new year? Some professional market watchers wrote (in the early days of January 2021) that mortgage rates got started this year minus volatility (at least early)…FHA loan rates on 30-year fixed-rate mortgages are reported in January 2021 below the three percent range–so far, fairly “typical” of what people have come to expect during the pandemic. At the time of this writing, you’ll find FHA mortgage loan interest rates are reported at 2.25% for “best execution” loans which have ideal conditions including a well-qualified borrower. | more...

January 15, 2021

FHA And HUD Update Construction Loan Rules

By Bruce Reichstein

If you are in the market for a home but would prefer to have a house built to your specifications instead of buying another person’s dream home, the One-Time Close mortgage can help you build instead of buy. This type of loan has an FHA equivalent with low down payment requirements (3.5% in typical cases) and there’s also a VA home loan option for those with qualifying military service. The FHA and HUD recently updated its rulebook for FHA Construction loans; there are revised definitions of properties that qualify for construction loans as well as new inspection rules. Back in 2020, the FHA and HUD announced some pending changes to the FHA Single-Family Home Loan Lender’s Handbook, HUD 4000.1 due to policy alterations in 2018 and 2019. Those alterations required | more...

Don't Make These Mistakes With Your One-Time Close Construction Loan

January 8, 2021

Monitoring Your Credit Ahead Of Your Rehab Loan Or One-Time Close Loan

By Bruce Reichstein

Credit monitoring is important for any consumer but borrowers interested in building a home on their own lot using a One-Time Close (OTC) construction loan or even an FHA 203(k) Rehab loan should give serious thought about investing in credit monitoring as early as possible in the planning stages. This can be a big advantage for those seeking rehab or construction loans; participating FHA lenders may require higher FICO scores for construction loans and you’ll want every advantage in that department including knowing the contents of your credit report and the changes to it as they happen. FHA Rehab Loans allow borrowers to buy fixer-upper loans and have work done to bring them up to code and FHA standards; FHA One-Time Close (OTC) mortgage loans allow borrowers to build a | more...

September 1, 2020

One-Time Close Construction Loan Mortgage Payments: What You Need To Know

By Joe Wallace

When do mortgage payments begin on a construction loan? If you are building on your own lot with a VA One-Time Close loan or an FHA OTC construction loan, you’ll want to know what you are liable for and when–and you’ll also want to know how delaying your mortgage payments until the home is complete will affect your monthly payments down the road. VA and FHA mortgage loan options include the ability to build a home on your own land using a VA One-Time Close construction loan or the FHA equivalent. One-Time Close loans allow you to build a house on your own land or purchase land in conjunction with building a home. There is a single application and approval process–these loans are potentially more streamlined and easier to manage | more...

August 17, 2020

Building A Home, Buying A Home

By Bruce Reichstein

Are you thinking about buying an existing home? Are you considering applying for a construction loan to build a house on your own lot instead? If you are trying to decide whether to build or buy, there are questions to ask before you commit to buying an existing construction property, or choose to apply for a One-Time Close mortgage to build on land you already own or purchase as part of the mortgage. What does it take to select the best option for your needs? There is an advantage to building a home from scratch–borrowers can influence the final outcome of the construction and help determine the nature of the house ahead of time. Some don’t enjoy sorting out such details, they gravitate toward the idea of looking at existing | more...