Single Close Construction Loans in Florence, TX
Florence, Texas, a charming small town in Williamson County, offers a peaceful Central Texas lifestyle ideal for building a new custom home. With its proximity to Austin and Georgetown, Florence attracts families and individuals seeking to create a primary residence in a close-knit community. A single close construction loan, also known as a one-time close loan, provides a streamlined solution for financing both the construction phase and the long-term mortgage in a single loan.
Unlike traditional construction loans that require a second loan and multiple closings, this construction-to-permanent loan involves only one closing process, saving time and money. In this article, Bob Fabian with GO Mortgage explores the benefits of single close construction loans in Florence, TX, helping borrowers meet their financing needs and build their dream home.
What Is a Single Close Construction Loan?
A single close construction loan is a financing option that funds both the construction of a new home and the long-term mortgage in one loan. This eliminates the need for a separate short-term loan and a second loan for the permanent mortgage, reducing paperwork and closing costs. For Florence residents, this loan type offers flexible options to finance a home construction project tailored to their vision.
Benefits of a Single Close Construction Loan
Single close construction loans provide several advantages for Florence borrowers:
- Only One Closing Process: Pay closing costs once, unlike traditional construction loans with multiple closings.
- Seamless Transition: The loan automatically converts to a permanent mortgage upon completion, eliminating the need for a second loan application.
- Cost Savings: A single loan reduces administrative fees, helping borrowers save money.
These benefits make single close construction loans an ideal choice for building in Florence’s growing community.
The Construction Phase in Florence
The construction phase, when your new custom home is built, typically lasts 6 to 12 months, depending on the project’s complexity. Funds from the single close construction loan are disbursed to your builder to cover labor, materials, and land preparation costs. In Florence, where rural properties may require specific considerations like septic systems, working with an experienced builder ensures compliance with Williamson County regulations.
Down Payment and Land Equity
The down payment for a single close construction loan varies by loan type. Conventional loans typically require 5–20% of the total project cost, while Federal Housing Administration (FHA) loans may need as little as 3.5%. Veterans Affairs (VA) loans, suitable for eligible veterans in Florence, often require no down payment. Land equity, if you own property, can be used toward the down payment, reducing upfront costs in this affordable Texas town.
Credit Score Requirements
Lenders typically require a minimum credit score to qualify for a single close construction loan. For conventional loans, a score of 680 or higher is often needed, but government-backed options like FHA or VA loans may accommodate lower credit scores, as low as 620. A strong credit profile helps Florence borrowers secure competitive rates and meet their financing needs.
Government-Backed Loan Options
Florence borrowers can explore government-backed loan programs for flexible financing:
- FHA Loans: These offer low down payments and lenient credit requirements, ideal for first-time homebuyers.
- VA Loans: Provide no down payment and competitive rates for veterans or active military members.
These options make construction financing accessible to a wide range of borrowers building a primary residence in Florence.
Closing Costs and the Closing Process
Closing costs for a single close construction loan include lender fees, title insurance, and appraisals. With only one closing, borrowers save on costs compared to traditional construction loans. The closing process involves submitting sensitive information, signing the construction contract, and finalizing the loan amount.
In Florence, a streamlined closing process ensures funds are approved quickly, allowing construction to begin without delays.
Interest Rates and Payment Structure
Interest rates for single close construction loans can be fixed or adjustable. Fixed rates provide stability for the long-term mortgage, while adjustable rates may offer lower initial payments during construction. During the construction phase, borrowers pay only interest on the disbursed funds, keeping payments manageable. Working with the right lender ensures competitive rates tailored to your financial situation.
Working with a Loan Officer and Builder
Partnering with an experienced loan officer and builder is key to a successful project. In Florence, a loan officer from GO Mortgage can guide you through the loan application, ensuring all requirements are met. A local builder familiar with Texas regulations collaborates with the lender to disburse funds on schedule, building a quality home that meets your specifications.
Contact Bob Fabian @ GO Mortgage for Your Single Close Loan
Ready to start building your dream home in Florence, TX? Bob Fabian with GO Mortgage is here to help you navigate the single close construction loan process.
Our team offers personalized support, flexible options, and competitive rates to meet your financing needs. Contact us today to discuss your construction project, submit your loan application, or learn more about building a new custom home in this charming Central Texas community.
