Like the man in the Fast Forward video says, a blueprint is not a house - so conventional home mortgages do not apply to construction projects.
However, most blueprints become houses - so loans that cover construction, then convert to permanent mortgages or construction perm loans are fairly common.
The construction loan phase is frequently a variable-rate loan, with scheduled loan draws to match construction stages.
Upon completion - usually a certificate of occupancy - commonly called a CO - the construction loan is converted to a permanent mortgage.
The advantage of construction perm loans is that you only need ONE application and ONE closing.
Compare interest-rate trends to your construction schedule (and assume construction delays) to evaluate if a rate-lock agreement on the permanent mortgage stage makes sense.
And weigh your construction-loan terms and their short-term cost against your mortgage rate, and it is probable long-term costs.
Compare lenders to get the best construction perm package for your situation.
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