A construction to permanent loan is a 2-part mortgage loan used to finance the construction of a home. There is a construction loan that is paid out in stages throughout the construction process, and when the home is complete, the amount you owe is converted into a permanent, traditional mortgage loan. Another common term for a construction to permanent loan is a single-close loan.

Mortgage loans are only granted on structures that already exist. They cannot be used when you want to buy land and build a home. For that, you need a construction loan, which is a short-term loan allowing you to buy land and build.

A unique feature of a construction loan is that it’s like a line of credit. You only draw what you need, and interest is only charged on the amount drawn. You can opt to secure two separate loans to finance the construction of your new home, but if two separate loans have to be taken out, that means two sets of closing costs. Also, the market may change during construction, and it may be more difficult to obtain a mortgage to finance the completed home, or interest rates rise leading to a much higher payment than originally anticipated.

If you choose Admiral Mortgage Solutions to finance the construction of your new home, you avoid these potential problems because we offer the one-time close construction to permanent financing. The construction to permanent loan avoids this dilemma because it starts as a construction loan. When the building is complete and inspected, it automatically converts to a permanent mortgage loan. You only have to close on your loan once which occurs before construction commences. Your interest rate is locked in and protected before construction starts which offers you peace of mind.