Selling the One-Time Close Construction Product

November 30, 2017

AFR Wholesale’s One-Time Close Construction to Permanent loan program is designed to make the home building and new home financing process a whole lot simpler.

With the OTC Construction to Perm loan, home buyers who build a new home can get financing for the lot purchase, construction and permanent mortgage, all with a single-close loan. As low inventory continues to challenge the housing market, OTC loans can help open up opportunities for both home buyers and mortgage professionals.

In today’s article, we’ll review a few ways to spread the word about OTC Construction to Permanent loan solutions.

Mention it to Clients Still Shopping Who are Getting Prequalified

Home buyers who are taking the steps to get preapproved or prequalified are already thinking proactively and preparing themselves for homeownership. Why not mention to them that – should they have trouble finding an existing home they love – you also offer a One-Time Close Construction to Permanent loans to make building your own home easy and affordable.

It’s understandable that the thought of building a home seems attractive but can also be intimidating since it involves multiple phases and closings. With most typical construction mortgage programs, a “first closing” takes place at the start of construction to finance the land and the construction. Next, a “second closing” occurs when the home is complete to put the permanent mortgage in place. This makes the whole process more complicated, especially if issues arise during the construction phase. Most experienced home buyers are aware that building a home can be complicated and time consuming. Help put their mind at ease by telling them that this OTC loan is different, since it rolls all the financing aspects into one, single-close loan.

Present OTC Loan Information to Real Estate Agents

Real estate agents have direct, frequent contact with your borrowers so it makes sense to keep them in the loop with your program offerings. Be sure to tell the real estate agents you know about the benefits of OTC Construction to Permanent loans and remind them you’ve included these products in your mortgage offerings. They may be working with home shoppers who are having a hard time finding a home on the market that meets their needs. With a OTC loan, they could consider designing and building a home that has everything they’re looking for, and their real estate agent can help them see the value in this option.

Send Information to Lot Owners

Did you know OTC borrowers can already own a lot and just finance the construction and permanent mortgage? Find out who is sitting on vacant residential lots in your service area and market information to those individuals. Landowners may have been reluctant to build for a variety of reasons – waiting for the means to finance construction and/or the permanent mortgage could be one of those reasons. With the OTC loan options, eligible borrowers can get a single-close loan to finance both the construction and permanent mortgage of a new home.

Share the Details of the Program with Home Builders

Just as it’s important to connect with area real estate agents, be sure to share information on your One-Time Close loans with are home builders. Like real estate agents, builders can have contact with potential borrowers as well as other industry professionals. The bottom line is, the more people know about this program, the better.

Benefits of One-Time Close Construction to Permanent Loans from AFR Wholesale

Take a look at the following key benefits for OTC loans so you can share this information with your network of borrowers, real estate professionals and home builders:

Lower Cost – One appraisal and one set of closing costs means a reduction in expenses, making the OTC loan an attractive and more affordable option for new construction homes.

Reduced Interest Rate Risk – Rather than waiting until the close of the construction phase to lock in a rate for the permanent mortgage, a OTC loan lets you lock in before the single closing and before construction begins. Since we all know rates fluctuate from day to day, this can provide rate security and peace of mind to your borrowers.

No Payments During Construction – This is a highly attractive feature for buyers. Even though the final financing phase is already in place once construction begins, the buyers do not have to make payments on the loan until the home is complete. This frees up funds for alternate housing arrangements, making the entire home building process much more affordable.

No Requalification – Before the builders break ground the closing is complete and there is no need for the borrowers to be requalified at the end of the construction phase. This eliminates concern that the appraisal might expire, or that issues could come up unexpectedly during the underwriting process, causing problems just as the buyers are preparing to settle into their new homes.

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