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Single Close Construction Loans: a Good Option for Homeowners

April 28, 2023

If you dream of building a beautiful, quiet house in the country or a large custom home in the Gulf Coast region, you may need a construction loan program to make your dream a reality.

However, new home construction can be complex as you navigate the timing and processes of buying land, constructing the home, and securing a mini-permanent mortgage*. A one-time close construction loan solves this problem by offering a straightforward process for financing each facet of a new home.

*NOTE: Some creditors may offer one-time-close construction loans that include a permanent mortgage, but Texas Gulf Bank’s one-time close construction loans only include a mini-permanent mortgage.

Discover the advantages of choosing single close construction loans, the application process, and what makes Texas Gulf Bank the perfect lending partner to help meet your family’s unique needs. Get ready to achieve your new home dreams.

Why Choose a Single Close Construction Loan? 

Many individuals that desire a custom home have been deterred by the idea of having separate loan programs for constructing the home and the mini-perm mortgage. A one-time close construction loan can simplify the loan process by combining the land purchase, home construction, and mini-permanent mortgage loan all in one.

This type of construction financing option offers potential borrowers several distinct benefits compared to separate loan programs. Find out why this personal lending option may be ideal for your situation.

Single Loan Application

Rather than completing multiple applications for home construction and a mini-permanent loan, borrowers complete only one set of application forms, which saves both time and money.

Closing Costs Savings

A single loan process means that borrowers only have to complete one loan closing, so you avoid paying closing costs multiple times. This effort may result in substantial savings since closing costs are usually several thousand dollars and involve several kinds of fees, forms, and appraisals. 

Strengthens Cash Flow

With a single close construction loan, borrowers should be able to improve their cash flow since they are responsible just for interest-only payments during the construction phase of their loan. This setup potentially allows you to preserve more of your cash to pay for new appliances or furnishings for your new house or to make improvements to your current home before you put it on the market. 

Provides Stable Funding for Builders

Rather than scrambling to pay your general contractor out of pocket for labor and materials during the home build, a single close construction loan provides stable project funding distributed as each construction phase is completed.

These distributions, known as construction draws, should ensure that your builder always has the funds needed to start the next phase so the project can be fully completed on time. A one-time close construction loan can cover all phases and costs related to the home building process:

  • Land purchase or land loan payoff
  • Construction permits
  • Architect fees
  • Builder costs for materials and labor
  • Allowances for plumbing, flooring, cabinetry, and appliances
  • Additional expenses 
Provides Peace of Mind

Choosing a one-time close construction loan gives you peace of mind that all major financial hurdles have been crossed. These loans lock in interest rates for the duration of the construction and mini-permanent mortgage loan term, so you do not risk the effects of a significant rise in interest rates and payments due to market fluctuations that could otherwise happen during that time period.

Constructing your dream home from the ground up is a big decision and financial commitment. Single close construction loans can simplify the new home construction process so you are able to pursue the custom home you have always wanted.

Choose Texas Gulf Bank for Home Construction Loan Needs 

Texas Gulf Bank has over 100 years of experience offering first-rate loan programs, strategic financial services, and exceptional customer service to individuals and families across the Gulf Coast region. Our loan specialists understand the financial needs of the local community and strive to offer a wide range of products and services that benefit our customers.

When you choose TGB for your single close construction loan needs, you can enjoy a positive, efficient lending experience. Several key factors set us apart from other banks in the area:

  • We make the loan process easy for the borrower
  • We do our own loan underwriting, resulting in a quicker approval
  • We are experienced lenders with an in-depth understanding of the region
  • We are committed to your success

Our team of construction loan specialists can answer all of your questions and help you understand each phase of the loan process, from construction to mini-permanent financing. 

Applying For Single Close Construction Loans 

Ready to get started with a single close construction loan with Texas Gulf Bank? The application process begins with an initial assessment with a loan officer to evaluate your loan qualifications. The ideal applicant should have the following in place:

  • Own their current property with sufficient equity to meet the bank’s criteria
  • Funds for the required down payment and reserves for unforeseen expenses
  • Contract with a reputable builder
  • Stable employment (bank’s minimum criteria for length of employment may apply)
  • Good credit history and credit score as defined by bank’s credit criteria

Potential borrowers that are an excellent fit for a single close construction loan will need to submit the following financial documentation as part of the loan application process:

  • Completed loan application
  • 3 years of personal tax returns
  • Current pay statements
  • 3 months of personal bank statements
  • Copy of lot deed
  • Builder’s contract
  • Full construction budget
  • Building plans and specs with timelines for construction draws

Once all required documents have been submitted, our in-house loan team will begin reviewing your application. Thanks to our in-house loan approval process, you may enjoy an expedited loan application and approval process. If approved, you may receive prompt loan funding so your construction work can begin as soon as possible.

Contact Us Today to Apply!

Texas Gulf Bank is an area leader in providing simple, effective loan solutions that allow you to realize your dreams and achieve your financial goals. A single close construction loan is an excellent option for homeowners that are interested in constructing their ideal custom home but need steady funding to get started. If you are ready to apply or want to speak to a loan officer about the application process, contact our bank today. Or, you can complete our website form to get started. Experience the community banking difference today.

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