October 3, 2024 • 16 mins
In this episode of Daily Mortgage Rates LIVE!, we’re uncovering the ins and outs of one-time close construction loans. If you’re dreaming of building your own home or embarking on a new construction project, this episode is designed for you. Join us as we explore how one-time close loans streamline the financing process by combining both the construction and permanent financing into a single loan.
We’ll discuss the advantages of this approach, such as reduced closing costs and simplified paperwork, as well as potential challenges to be aware of.
Whether you’re a first-time builder or a seasoned developer, this episode is packed with essential information and practical advice to help you navigate the construction loan landscape. Tune in to learn how one-time close construction loans can make your building dreams a reality without the headaches!
For more episodes visit: https://themortgagecalculator.com/Page/Daily-Mortgage-Rates-LIVE-Video-Podcast
About The Mortgage Calculator:
The Mortgage Calculator is a licensed Mortgage Lender (NMLS #2377459) that specializes in using technology to enable borrowers to access Conventional, FHA, VA, and USDA Programs, as well as over 5,000 Non-QM mortgage loan programs using alternative income documentation!
Using The Mortgage Calculator proprietary technology, borrowers can instantly price and quote thousands of mortgage loan programs in just a few clicks. The Mortgage Calculator technology also enables borrowers to instantly complete a full loan application and upload documents to our AI powered software to get qualified in just minutes!
Our team of over 350 licensed Mortgage Loan Originators can assist our customers with Conventional, FHA, VA and USDA mortgages as well as access thousands of mortgage programs using Alternative Income Documentation such as Bank Statement Mortgages, P&L Mortgages, Ass
The Mortgage Calculator is a licensed Mortgage Lender (NMLS #2377459) that specializes in using technology to enable borrowers to access Conventional, FHA, VA, and USDA Programs, as well as thousands of Non-QM mortgage loan program variations using alternative income documentation!
Using The Mortgage Calculator proprietary technology, borrowers can instantly price and quote thousands of mortgage loan programs in just a few clicks. The Mortgage Calculator technology also enables borrowers to instantly complete a full loan application and upload documents to our AI powered software to get qualified in just minutes!
Our team of licensed Mortgage Loan Originators can assist our customers with Conventional, FHA, VA and USDA mortgages as well as access thousands of mortgage programs using Alternative Income Documentation such as Bank Statement Mortgages
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Restream recording Oct 03, 2 (00:00):
So welcome everyone.
My name is Kyle Hiersche.
I'm the CEO of the MortgageCalculator joined here by our
president Nick Hiersche and ourCSO Jose Gonzalez.
We are a lender that specializesin non QM loans and what we do
every weekday at 11 a.
m.
Eastern on this show is gothrough our actual live mortgage
rates for a few programs.
Then we do a deep dive into adifferent loan type.
And today's loan type is goingto be one time closed
(00:20):
construction loans.
Amazing topic here.
I'm sure Jose has some greatoptions for us to check out, but
first let's look at the rates.
So Nick, if you're ready, let'spull up today's rates.
them out.
All right.
So w rates for all of our stanoctober 3rd, just after 1 of our
(00:42):
initial rate sheets and we willcompare the A a full breakdown
and item that breaks down allthe the A.
P.
R.
Please get w They'd be happy tosend t For the demos, we'll
always use a standard scenarioso we can compare across all the
programs.
We'll set up a single familyhome, 500, 000 purchase, 400,
000 loan amount, corresponds to80 percent loan to value, 20
(01:05):
percent down payment.
We'll set an estimated 760 FICOcredit score and an estimated 40
percent debt to income ratio.
So with those settings, as we doevery day, let's check out the
rates.
First up, our 30 year fixedconventional option, typically
the most common option peoplethink of when they're thinking
(01:25):
of a mortgage.
Rates as low as 5.
875 today.
Final APR Again, these are aboutone year lows, about the same as
it was yesterday.
Now, if for any reason ourcustomer doesn't qualify for a
conventional option, wetypically want to present an FHA
option as well.
FHA allows more leniency oncredit issues and a higher debt
to income ratio, but doesrequire upfront and yearly
(01:46):
mortgage insurance.
FHA comes in today 4.
99.
Final APR with all the fees andmortgage insurance, 5.
924.
So we compare that toconventional.
If our customer qualifies forboth, they may want to consider
FHA if they're willing to do themortgage insurance.
And our customers that need touse it, great option here.
And our VA programs are only foreligible vets and active service
(02:09):
members.
If you are eligible, theseprograms are definitely amazing.
Rates as low as 5.
125.
Final APR with a standardfunding fee, 5.
426.
5.
426.
And notice if our customerqualifies for VA, definitely
going to be a better option thanFHA or conventional.
So great option for our vets andservice members.
And the final standard optionthat every Baker lender has is
(02:31):
USDA.
USDA is only for USDA eligibleproperties, which is the rural
areas of the country.
The property's eligible and ourborrower's eligible.
These are great programs tocompare.
Today comes in at 4.
99 rate.
Final APR, the fees included 5.
716.
So as usual, if our customer isshopping in those areas and
they're comparing to an FHA,USDA is going to be a touch
(02:52):
cheaper typically.
And same thing withconventional, going to be a
touch cheaper than conventional.
So great option for thoseproperties in those rural areas.
And that rounds out the standardoptions.
If our customer doesn't qualify,many banks or lenders will have
to deny them.
But here at the mortgagecalculator, we have 5, 000
additional options, startingwith our non QM all doc options.
So if the customer doesn'tqualify using tax returns Uh,
(03:15):
standard documentation forconventional FHA, et cetera.
We can switch to alternativedocs such as bank statements,
1099s, PNLs, all kinds ofdifferent options.
And today, bank statements comein at 6.
125 rate, final ACR 6.
425 within about 0.
3 today of conventional.
So great option for ourborrowers, almost identical cost
(03:37):
there to switch to alternativedocumentation.
And we can use AltDocs forinvestment properties and all
kinds of different options forinvestment.
So first up is the AltDoc,again, bank statement or
similar, 6.
625 rate today, final APR 6.
951.
And we'll compare that to theother investment options.
We have our conventional option.
(03:58):
Remember, there are nogovernment options, so no USDA,
VA, or FHA, but conventionalcomes in today at 6.
375 for an investment property.
LPR 6.
710.
So as typical, it's a touchcheaper than a bank statement
option.
But uh, what is not typical andexcites us here at the mortgage
calculator, we have our DSCRoptions, no income, no
(04:20):
employment needed that can beatour conventional options, which
is amazing.
So DSCR stands for debt servicecoverage ratio.
We don't need any income oremployment info.
We simply use estimated rentsfrom the appraisal to determine
a DSCR ratio.
The estimated rents can coverthe estimated expenses.
That's a positive DSCR ratio.
Okay, the property will cashflow and this is our option with
a three year prepayment penaltyhere.
(04:41):
Rates as low as 6.25, final PR6.578, so squeaking out
conventional a touch and we cansweeten the deal even more with
a five year prepayment penaltyon some programs.
Rates come down to as low as6.000 today, final PR 6.297.
Again, being conventional.
That is amazing.
(05:02):
And we have our no prepaymentpenalty option as some states
don't allow it and someinvestors prefer not to have
one.
Rates as low as 6.
625 today, final APR 6.
951, which is a touch higherthan conventional, which is
typical, but I'd still say 100percent of investors would
choose a DSCR when the costs arevery similar.
And the final two options we goover every day, our second
(05:23):
mortgage option.
So many of our customers have afirst mortgage that is lower
than what we're seeing here.
On the presentation and want tokeep that first mortgage in
place, but want to access theirequity and get some cash out.
Typically a HELOC is the onlyoption, but we have our 30 year
fixed second mortgages now,which are a little bit superior
for most borrowers to a HELOCbecause they are fixed instead
(05:44):
of adjustable and much lowerrates.
So for a primary home, we canget cash out rates as low as 8.
125.
Final APR 8.
527.
And for an investment property,we can use the same program to
get cash out without touchingthat first mortgage.
Rates as 25, final APR 9.
572.
And these are both non QMprograms, we can use bank
statements, uh, P& Ls, andsimilar.
(06:07):
Let's get into our topic fortoday.
Again, Our deep dive topics aretypically the types of quotes
that we can't present on ourlive pricing demo here because
they are very unique.
So one time closed constructionloans, definitely very unique.
Jose talked about renovationloans yesterday.
These are going to be, insteadof renovating a property, we're
going to build a property fromscratch.
(06:30):
Remember a renovation could beeven a property burned all the
way down, but there's still afoundation and there's still,
you know, a registration withthe city for a property that was
there.
We're going to rebuild, but whenwe're talking one time close,
we're talking empty ground thatthen we build a new home on and
a new foundation and issue a newcertificate certificate of
occupancy.
So a little bit difference, alittle bit of a difference there
(06:52):
between a rehab, even if it'slike complete rebuild, if there
was a house there before that'sstill a rehab.
If it's just bare land, nowwe're talking one time closed
construction.
So let's explain how this workshere, Jose, and then check out
some actual options.
Yep.
Good morning, everybody.
Thank you for joining us fordaily mortgage rates live with
the mortgage calculator.
So, uh, we previously discussedthe renovation loans, which Nick
(07:15):
was just mentioning.
So now this one is the ultimatedream, right?
So you can't find the, yourdream home, but you found that
parcel of land in theneighborhood that you would
really love to live in.
So this is the, the option thatmakes your dream.
A reality.
This is the one where you canbuy the land, build the home.
(07:39):
All with one loan and then thatloan, that's what they call it a
one time close because the loanonce the construction phase is
completed, then that loantransitions to the end loan, the
permanent loan on the property.
That's why they call this loanconstruction to permanent loan.
Starts off as a constructionloan and then transitions to the
(08:00):
permanent loan when theconstruction phase is complete.
Now maximum construction phaseon this is 12 months.
So you do have to have all ofyour variables in order.
The plans need to be completed,uh, and probably approved
already because it could takesix months to a year in some
(08:21):
cases for plans to be approved.
And if they're not even createdyet by the architect, that could
take some more time if it's acustom made home.
So plans need to be approved.
You definitely need to have yourcontractor already lined up.
Because in a one time closedloan, just like in a renovation
loan, uh, we have to approve thecontractor.
(08:42):
We have to approve theconstruction.
In other words, the budget andeverything that's being done.
And we have to approve theborrower's credit and income as
well.
So three components need to beapproved.
So you can't just say, Let meapply for a one time closed
loan.
Let me get the loan and then letme put all those variables in
order because then your 12 monthbuild period would expire by the
(09:05):
time you have your plans inorder and then you're ready to
apply for the loan.
And then now your 12 month timeis up.
So definitely everything has tobe completed up front.
And that's usually the biggestchallenge is not the credit and
income, Of the borrower, but thecontractor and the logistics of
having all the paperwork,including the plans and what are
(09:27):
the going to be the permits andall those items lined up.
So let's go and get into theexamples we have for today.
Now, though, the one time closeis possible for a purchase for
all agency loans, and then it ispossible for a rate and term
refinance, which is a veryinteresting option for a
(09:48):
conventional loan.
So I'm going to share all ofthose with you now.
First option we have here.
The USDA one time close, whichthis one is especially
attractive because not only isit 100 percent financing here,
but great rates as you can see,not much of a loan level price
adjustment when you are, um,using the one time close option
(10:10):
combined with a purchase.
So here, uh, the other thing toconsider on the USDA one time
close.
that it does allow for doublewide manufactured homes to be
purchased and attachedpermanently to the land.
So it has to be a newmanufactured home, can't be a
(10:32):
used one, has to have never beenattached anywhere.
And then, you know, you buy itfrom the manufacturer, they
transport it to the site.
And they put it together andattach it to the foundation.
That's the construction phase ofit.
So very good option there at, ata 6.
75 lowest cost option at par and5.
5 percent being our lowest rateoption for USDA.
(10:57):
One time close, a hundredpercent LTV purchase option.
Now VA also 100 percent LTV onthe one time close, uh, rates
equally as good.
And great news, you can alsopurchase a brand new
manufactured home, uh, under theone time closed loan and have it
(11:17):
also put together on site andpermanently attached to land.
So this is probably good newsfor a lot of borrowers out
there.
I get this question every nowand then.
So now everyone that's watchinghere, you are empowered to know
that this is the most amazingdeal out there.
Uh, so we're looking at 7.
125 lowest cost option, almostat par, and you can buy that
(11:39):
down all the way to 5.
25 percent interest rate at acost of 2.
449.
FHA one time closed loan alsoallows purchasing a manufactured
home and attaching it to theland, uh, via the one time
closed option.
Also imagine this a one unit ora two to four unit property
(12:03):
also.
So a lot of options here withFHA and your one time closed
loan.
Uh, now you will notice, uh,rates are a little bit higher,
obviously in the one time closedthan in the regular financing,
because essentially when you,uh, when you borrow with the one
time closed loan, theyessentially, if it's a 12 month
(12:24):
construction phase, they arelocking in your rate.
For 12 months.
That's a very long extended ratelock.
Hence pricing is a little bithigher.
So 8 percent is your lowest costoption at a cost of 0.
875.
And you can buy that down to 7percent at a cost of two and a
quarter points.
(12:45):
And now for our last purchaseoption, before we're showing you
the refi option is ourconventional one time close
purchase, 95 percent LTV.
8.
75 lowest cost option, 8.
25 lowest rate option.
Now for this particular one timeclose option for a conventional
loans, uh, manufactured homepurchase is not possible with
(13:08):
the conventional option.
So USDA, uh, VA, uh, and FHA,Yes.
Manufactured home with theconstruction loan.
Conventional.
No.
For whatever reason, theconventional, um, one time
closed option was prettyrestricted, uh, when we started
having issues, uh, with thepricing.
(13:29):
So it is a little bit lessliquid in pricing than the GSEs
that are government related likeVA, FHA, and USDA.
They go through Ginnie Mae.
They're a little bit more liquidand secondary.
So they were able.
to maintain, uh, their moreoptions in the one time close
loan conventional, not as much,but we can still do it, uh, 95
(13:53):
percent LTV and you're lookingat 8.
75 lowest cost option and 8.
25 lowest rate options but justdo be on the lookout when you
are structuring your one timeclosed loans for conventional
properties because they do havealso in some of the cases
restrictions on site built homesright where they may accept only
(14:15):
other types of homes but not asite built home so do look for
that restriction and our lastoption here is the one time
closed rate in term refinance upto 95 percent LTV.
Conventional is the only option.
That offers a rate in turn refifor the one time closed loan.
The, uh, the GST, uh, otheragency options do not offer it
(14:37):
conventional does.
Uh, so it's great because if yougot that piece of land, just
sitting around.
Already paid off.
And now you want to build ahome.
That's where you do the limitedcash out, refi rate and term
conventional, and you can getthe home built 8.
75 lowest cost option at a costof 1.
75 points and 8.
(14:58):
25 is your lowest cost.
great option at a cost of 2.
5 points.
So again, be the dream maker,uh, for your borrowers out there
and let them know this ispossible.
Also let all of your realtorpartners know that, uh, all of
these possibilities with the onetime closed construction, the
permanent loan, as I'm surethey're out there struggling,
(15:20):
trying to find properties fortheir borrowers or trying to
find ready built homes fortheir, for their buyers.
Whereas they may be able to findsome, some nice, beautiful lots
in the area where they want toactually live.
And then you can facilitate thatwith the one time closed loan.
All right.
Perfect.
(15:40):
Okay.
I don't see any questions, sowe'll go ahead and wrap it up.
Absolutely amazing programthere.
So.
Remember that we do this show at11 a.
m.
Eastern every weekday where wego through our live rates and
then do a deep dive intodifferent loan types.
We'll be back tomorrow with anew loan type.
We appreciate everybody tuningin.
We'll see you tomorrow at 11 a.
m.
Eastern for the next episode ofDaily Rates Live with the
Mortgage Calculator.
So welcome everyone.
My name is Kyle Hiersche.
I'm the CEO of the MortgageCalculator joined here by our
president Nick Hiersche and ourCSO Jose Gonzalez.
We are a lender that specializesin non QM loans and what we do
every weekday at 11 a.
m.
Eastern on this show is gothrough our actual live mortgage
rates for a few programs.
Then we do a deep dive into adifferent loan type.
And today's loan type is goingto be one time closed
(00:20):
construction loans.
Amazing topic here.
I'm sure Jose has some greatoptions for us to check out, but
first let's look at the rates.
So Nick, if you're ready, let'spull up today's rates.
them out.
All right.
So w rates for all of our stanoctober 3rd, just after 1 of our
(00:42):
initial rate sheets and we willcompare the A a full breakdown
and item that breaks down allthe the A.
P.
R.
Please get w They'd be happy tosend t For the demos, we'll
always use a standard scenarioso we can compare across all the
programs.
We'll set up a single familyhome, 500, 000 purchase, 400,
000 loan amount, corresponds to80 percent loan to value, 20
(01:05):
percent down payment.
We'll set an estimated 760 FICOcredit score and an estimated 40
percent debt to income ratio.
So with those settings, as we doevery day, let's check out the
rates.
First up, our 30 year fixedconventional option, typically
the most common option peoplethink of when they're thinking
(01:25):
of a mortgage.
Rates as low as 5.
875 today.
Final APR Again, these are aboutone year lows, about the same as
it was yesterday.
Now, if for any reason ourcustomer doesn't qualify for a
conventional option, wetypically want to present an FHA
option as well.
FHA allows more leniency oncredit issues and a higher debt
to income ratio, but doesrequire upfront and yearly
(01:46):
mortgage insurance.
FHA comes in today 4.
99.
Final APR with all the fees andmortgage insurance, 5.
924.
So we compare that toconventional.
If our customer qualifies forboth, they may want to consider
FHA if they're willing to do themortgage insurance.
And our customers that need touse it, great option here.
And our VA programs are only foreligible vets and active service
(02:09):
members.
If you are eligible, theseprograms are definitely amazing.
Rates as low as 5.
125.
Final APR with a standardfunding fee, 5.
426.
5.
426.
And notice if our customerqualifies for VA, definitely
going to be a better option thanFHA or conventional.
So great option for our vets andservice members.
And the final standard optionthat every Baker lender has is
(02:31):
USDA.
USDA is only for USDA eligibleproperties, which is the rural
areas of the country.
The property's eligible and ourborrower's eligible.
These are great programs tocompare.
Today comes in at 4.
99 rate.
Final APR, the fees included 5.
716.
So as usual, if our customer isshopping in those areas and
they're comparing to an FHA,USDA is going to be a touch
(02:52):
cheaper typically.
And same thing withconventional, going to be a
touch cheaper than conventional.
So great option for thoseproperties in those rural areas.
And that rounds out the standardoptions.
If our customer doesn't qualify,many banks or lenders will have
to deny them.
But here at the mortgagecalculator, we have 5, 000
additional options, startingwith our non QM all doc options.
So if the customer doesn'tqualify using tax returns Uh,
(03:15):
standard documentation forconventional FHA, et cetera.
We can switch to alternativedocs such as bank statements,
1099s, PNLs, all kinds ofdifferent options.
And today, bank statements comein at 6.
125 rate, final ACR 6.
425 within about 0.
3 today of conventional.
So great option for ourborrowers, almost identical cost
(03:37):
there to switch to alternativedocumentation.
And we can use AltDocs forinvestment properties and all
kinds of different options forinvestment.
So first up is the AltDoc,again, bank statement or
similar, 6.
625 rate today, final APR 6.
951.
And we'll compare that to theother investment options.
We have our conventional option.
(03:58):
Remember, there are nogovernment options, so no USDA,
VA, or FHA, but conventionalcomes in today at 6.
375 for an investment property.
LPR 6.
710.
So as typical, it's a touchcheaper than a bank statement
option.
But uh, what is not typical andexcites us here at the mortgage
calculator, we have our DSCRoptions, no income, no
(04:20):
employment needed that can beatour conventional options, which
is amazing.
So DSCR stands for debt servicecoverage ratio.
We don't need any income oremployment info.
We simply use estimated rentsfrom the appraisal to determine
a DSCR ratio.
The estimated rents can coverthe estimated expenses.
That's a positive DSCR ratio.
Okay, the property will cashflow and this is our option with
a three year prepayment penaltyhere.
(04:41):
Rates as low as 6.25, final PR6.578, so squeaking out
conventional a touch and we cansweeten the deal even more with
a five year prepayment penaltyon some programs.
Rates come down to as low as6.000 today, final PR 6.297.
Again, being conventional.
That is amazing.
(05:02):
And we have our no prepaymentpenalty option as some states
don't allow it and someinvestors prefer not to have
one.
Rates as low as 6.
625 today, final APR 6.
951, which is a touch higherthan conventional, which is
typical, but I'd still say 100percent of investors would
choose a DSCR when the costs arevery similar.
And the final two options we goover every day, our second
(05:23):
mortgage option.
So many of our customers have afirst mortgage that is lower
than what we're seeing here.
On the presentation and want tokeep that first mortgage in
place, but want to access theirequity and get some cash out.
Typically a HELOC is the onlyoption, but we have our 30 year
fixed second mortgages now,which are a little bit superior
for most borrowers to a HELOCbecause they are fixed instead
(05:44):
of adjustable and much lowerrates.
So for a primary home, we canget cash out rates as low as 8.
125.
Final APR 8.
527.
And for an investment property,we can use the same program to
get cash out without touchingthat first mortgage.
Rates as 25, final APR 9.
572.
And these are both non QMprograms, we can use bank
statements, uh, P& Ls, andsimilar.
(06:07):
Let's get into our topic fortoday.
Again, Our deep dive topics aretypically the types of quotes
that we can't present on ourlive pricing demo here because
they are very unique.
So one time closed constructionloans, definitely very unique.
Jose talked about renovationloans yesterday.
These are going to be, insteadof renovating a property, we're
going to build a property fromscratch.
(06:30):
Remember a renovation could beeven a property burned all the
way down, but there's still afoundation and there's still,
you know, a registration withthe city for a property that was
there.
We're going to rebuild, but whenwe're talking one time close,
we're talking empty ground thatthen we build a new home on and
a new foundation and issue a newcertificate certificate of
occupancy.
So a little bit difference, alittle bit of a difference there
(06:52):
between a rehab, even if it'slike complete rebuild, if there
was a house there before that'sstill a rehab.
If it's just bare land, nowwe're talking one time closed
construction.
So let's explain how this workshere, Jose, and then check out
some actual options.
Yep.
Good morning, everybody.
Thank you for joining us fordaily mortgage rates live with
the mortgage calculator.
So, uh, we previously discussedthe renovation loans, which Nick
(07:15):
was just mentioning.
So now this one is the ultimatedream, right?
So you can't find the, yourdream home, but you found that
parcel of land in theneighborhood that you would
really love to live in.
So this is the, the option thatmakes your dream.
A reality.
This is the one where you canbuy the land, build the home.
(07:39):
All with one loan and then thatloan, that's what they call it a
one time close because the loanonce the construction phase is
completed, then that loantransitions to the end loan, the
permanent loan on the property.
That's why they call this loanconstruction to permanent loan.
Starts off as a constructionloan and then transitions to the
(08:00):
permanent loan when theconstruction phase is complete.
Now maximum construction phaseon this is 12 months.
So you do have to have all ofyour variables in order.
The plans need to be completed,uh, and probably approved
already because it could takesix months to a year in some
(08:21):
cases for plans to be approved.
And if they're not even createdyet by the architect, that could
take some more time if it's acustom made home.
So plans need to be approved.
You definitely need to have yourcontractor already lined up.
Because in a one time closedloan, just like in a renovation
loan, uh, we have to approve thecontractor.
(08:42):
We have to approve theconstruction.
In other words, the budget andeverything that's being done.
And we have to approve theborrower's credit and income as
well.
So three components need to beapproved.
So you can't just say, Let meapply for a one time closed
loan.
Let me get the loan and then letme put all those variables in
order because then your 12 monthbuild period would expire by the
(09:05):
time you have your plans inorder and then you're ready to
apply for the loan.
And then now your 12 month timeis up.
So definitely everything has tobe completed up front.
And that's usually the biggestchallenge is not the credit and
income, Of the borrower, but thecontractor and the logistics of
having all the paperwork,including the plans and what are
(09:27):
the going to be the permits andall those items lined up.
So let's go and get into theexamples we have for today.
Now, though, the one time closeis possible for a purchase for
all agency loans, and then it ispossible for a rate and term
refinance, which is a veryinteresting option for a
(09:48):
conventional loan.
So I'm going to share all ofthose with you now.
First option we have here.
The USDA one time close, whichthis one is especially
attractive because not only isit 100 percent financing here,
but great rates as you can see,not much of a loan level price
adjustment when you are, um,using the one time close option
(10:10):
combined with a purchase.
So here, uh, the other thing toconsider on the USDA one time
close.
that it does allow for doublewide manufactured homes to be
purchased and attachedpermanently to the land.
So it has to be a newmanufactured home, can't be a
(10:32):
used one, has to have never beenattached anywhere.
And then, you know, you buy itfrom the manufacturer, they
transport it to the site.
And they put it together andattach it to the foundation.
That's the construction phase ofit.
So very good option there at, ata 6.
75 lowest cost option at par and5.
5 percent being our lowest rateoption for USDA.
(10:57):
One time close, a hundredpercent LTV purchase option.
Now VA also 100 percent LTV onthe one time close, uh, rates
equally as good.
And great news, you can alsopurchase a brand new
manufactured home, uh, under theone time closed loan and have it
(11:17):
also put together on site andpermanently attached to land.
So this is probably good newsfor a lot of borrowers out
there.
I get this question every nowand then.
So now everyone that's watchinghere, you are empowered to know
that this is the most amazingdeal out there.
Uh, so we're looking at 7.
125 lowest cost option, almostat par, and you can buy that
(11:39):
down all the way to 5.
25 percent interest rate at acost of 2.
449.
FHA one time closed loan alsoallows purchasing a manufactured
home and attaching it to theland, uh, via the one time
closed option.
Also imagine this a one unit ora two to four unit property
(12:03):
also.
So a lot of options here withFHA and your one time closed
loan.
Uh, now you will notice, uh,rates are a little bit higher,
obviously in the one time closedthan in the regular financing,
because essentially when you,uh, when you borrow with the one
time closed loan, theyessentially, if it's a 12 month
(12:24):
construction phase, they arelocking in your rate.
For 12 months.
That's a very long extended ratelock.
Hence pricing is a little bithigher.
So 8 percent is your lowest costoption at a cost of 0.
875.
And you can buy that down to 7percent at a cost of two and a
quarter points.
(12:45):
And now for our last purchaseoption, before we're showing you
the refi option is ourconventional one time close
purchase, 95 percent LTV.
8.
75 lowest cost option, 8.
25 lowest rate option.
Now for this particular one timeclose option for a conventional
loans, uh, manufactured homepurchase is not possible with
(13:08):
the conventional option.
So USDA, uh, VA, uh, and FHA,Yes.
Manufactured home with theconstruction loan.
Conventional.
No.
For whatever reason, theconventional, um, one time
closed option was prettyrestricted, uh, when we started
having issues, uh, with thepricing.
(13:29):
So it is a little bit lessliquid in pricing than the GSEs
that are government related likeVA, FHA, and USDA.
They go through Ginnie Mae.
They're a little bit more liquidand secondary.
So they were able.
to maintain, uh, their moreoptions in the one time close
loan conventional, not as much,but we can still do it, uh, 95
(13:53):
percent LTV and you're lookingat 8.
75 lowest cost option and 8.
25 lowest rate options but justdo be on the lookout when you
are structuring your one timeclosed loans for conventional
properties because they do havealso in some of the cases
restrictions on site built homesright where they may accept only
(14:15):
other types of homes but not asite built home so do look for
that restriction and our lastoption here is the one time
closed rate in term refinance upto 95 percent LTV.
Conventional is the only option.
That offers a rate in turn refifor the one time closed loan.
The, uh, the GST, uh, otheragency options do not offer it
(14:37):
conventional does.
Uh, so it's great because if yougot that piece of land, just
sitting around.
Already paid off.
And now you want to build ahome.
That's where you do the limitedcash out, refi rate and term
conventional, and you can getthe home built 8.
75 lowest cost option at a costof 1.
75 points and 8.
(14:58):
25 is your lowest cost.
great option at a cost of 2.
5 points.
So again, be the dream maker,uh, for your borrowers out there
and let them know this ispossible.
Also let all of your realtorpartners know that, uh, all of
these possibilities with the onetime closed construction, the
permanent loan, as I'm surethey're out there struggling,
(15:20):
trying to find properties fortheir borrowers or trying to
find ready built homes fortheir, for their buyers.
Whereas they may be able to findsome, some nice, beautiful lots
in the area where they want toactually live.
And then you can facilitate thatwith the one time closed loan.
All right.
Perfect.
(15:40):
Okay.
I don't see any questions, sowe'll go ahead and wrap it up.
Absolutely amazing programthere.
So.
Remember that we do this show at11 a.
m.
Eastern every weekday where wego through our live rates and
then do a deep dive intodifferent loan types.
We'll be back tomorrow with anew loan type.
We appreciate everybody tuningin.
We'll see you tomorrow at 11 a.
m.
Eastern for the next episode ofDaily Rates Live with the
Mortgage Calculator.
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