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Break Ground Without Breaking the Bank

Blog Post
2 min read
home with a blue print overlay

Imagine waking up every morning in the South Carolina home you've always dreamed of. When you have complete control over the design and features, you can tailor a home to meet your specific tastes and needs. But navigating the financial aspect of the homebuilding process can be daunting. Here’s a blueprint of how a construction-to-permanent mortgage can save time and money.

What is a construction-to-permanent mortgage?

A construction-to-permanent mortgage is a type of loan that can be used to finance the construction of a new home. Building from the ground up typically involves several stages, including site preparation, foundation construction, framing, and finishing. This type of financing typically includes multiple disbursements during each stage before transitioning into a permanent or more traditional mortgage loan.

However, loan features differ by lender. For example, a SAFE construction-to-permanent mortgage lets you:

Finance Up to 95% of the Cost to Build

One of the most attractive features of a construction-to-permanent mortgage is the ability to finance up to 95% of the cost of building your new home. This means you can start building your dream home with as little as 5% down, making the process more affordable.

Lock in a Low Interest Rate

SAFE's construction-to-permanent mortgage lets you lock in your interest rate and close your loan before breaking ground. This provides peace of mind and financial stability, as you won't have to worry about fluctuating interest rates during construction. With other types of financing, you may have to wait until construction is underway or complete to lock in your rate, leaving you vulnerable to market changes.

Make Limited Interest Payments

During construction, loan disbursements are made to cover the cost of building your home. These disbursements are made in stages and based on the percentage of completion. Interest is paid only on the loan’s outstanding balance, which means you'll only be paying interest on the money that has been disbursed, not the whole amount.

Experience a Smooth Transition to Permanent Financing

One of the most significant benefits is the smooth transition from the construction phase to permanent financing. With only one application and one closing, you can save time and money on the overall process. This streamlined approach also reduces the stress and uncertainty of securing financing for your new home.

Delay Monthly Mortgage Payments

Only when your home is complete and your construction loan converts to a permanent mortgage will you begin making monthly payments of principal and interest, plus escrow. This means you won't have to worry about making payments during the construction phase, allowing you to focus on the exciting process of watching your vision come to life.

Building your dream home is possible when you have the right financing in place. Whether you're a first-time homebuilder or a seasoned pro, SAFE's construction-to-permanent mortgage can provide the financial support you need, when you need it.

Apply today or contact us to discuss your options!