OTC-One Time Close Construction Loan

We now offer customers OTC loans. OTC stands for One Time Close. It is one loan that consists of three. It covers the purchase of a lot, construction, and permanent or end loan. This makes construction loans easier for everyone.

The purchase of the lot or land is just that. When building that dream home, you must own the land it sits on. Most times, the land that is being used to perform the new construction of the house being built is not owned free and clear. OTC allows you to purchase that lot or piece of land with this loan. Once the land is selected and is purchased, next comes the construction part of the deal. During this, you choose a period of how many months it will take for the home to be completed. This could take as little as six months or as long as eighteen months on average. Of course, you need to have a general contractor to give you a bid on the project and an estimate of how long it will take for completion. The construction expenses are set up on a draw which can be made by the builder, borrower, or both. The rate of the construction loan is temporary and is usually tied to prime rate + 1%. When construction is completed, the loan needs to go into a permanent loan status. This is the loan that is your traditional long term loan. What's nice about OTC, is that rate for the permanent loan is already locked in for what you agreed on at closing of the lot and construction loan. The rate on the permanent loan will be much better than that of the temporary loan during the construction period. On average from start(when documents are received from borrower) to finish(when loan is being closed) of the loan process is twenty-one business days.

OTC is a great program for people wanting to build that dream home and have no worries on how to get all three loans approved. Do not hesitate to contact us here at Professional Mortgage Group, Inc. to discuss some OTC possibilities.