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Everyone can build that dream home!
Security Trust Mortgage, Inc. has almost every type
of construction program imaginable! From fast closing one-step, or single loans (see first section below) to regular separate
construction and final take-out loans (section 2 below).
We have programs for the owner builder with NO contractor
involved! Commercial also available.
How about building your dream home with almost NO money down and not having to
qualify for the loan? And all that without having perfect credit!
ONE STEP:
A one-step loan is a single loan that closes before construction begins. It pays out in parts called 'draws' throughtout
the construction process. When the last draw has been paid and the home is finished, the amount borrowed at that time becomes
the final loan for either 15 or 30 years. There is no need for another loan.
ADVANTAGE:
you know what your rate is for the life of the loan, and you only have closing costs on one loan.
DISADVANTAGE:
The rates are usually higher than prevailing rates of the same term loan, and you do not have many loan programs available.
TWO STEP:
Two-step loans are the most commonly used, especially
by contractors. The first step is a straight construction loan. It is usually based on prime rate plus a profit margin of
1.5 to 2 points. The loan needs to be replaced by a final, or 'take-out' loan when the property is finished.
ADVANTAGE: You can choose whatever type of permanent loan for which you qualify. The fixed rate take-outs
are usually lower than the fixed 'one-step' type decribed in the first section. Aso, it is easier to qualify for a two-step
process because many construction lenders will base a large part of their decision to qualify you on the fact that you are
pre-qualified for permanent financing. There are many low down, nothing down, and low credit score take-out programs that
are more flexible than the one-step.
DISADVANTAGE: Double closing costs and not
being able to tell what rates will be when you are ready for the final permanent loan. Long locks are available for these
loans but the lock has a cost.
We have some application and information forms on our 'apply for mortgage' page.
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Raw building lot loans to 90% loan to
value!
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