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Building is financed differently. During construction you pay interest only on what has actually been drawn, so the payment starts small and climbs as the house goes up.

A one-time-close loan converts to permanent financing at completion with a single closing, no re-qualifying, no second set of costs.

Your numbers

$110,000
$425,000

Your results

Permanent monthly payment (P&I)

$3,247

After conversion at completion

Average draw-period payment
$1,564Interest only, rises as draws are taken
Final month draw payment
$3,129
Interest paid during construction
$14,080
Total project cost
$556,250Includes $21,250 contingency
Cash required at closing
$55,625Land purchased with the loan
Loan amount
$500,625
Land equity credited
$0

What happens if you change this

Your permanent payment lands at $3,247 once the home converts. During the 9-month build you pay interest only on drawn funds, starting small and reaching $3,129 in the final month, averaging $1,564 and totaling about $14,080. Buying the land through the loan means $55,625 in cash at closing. Owning the land outright would credit $110,000 toward that. The 5% contingency of $21,250 is not optional in practice, builds almost always find something.

Keep these numbers

Your results are yours already. If it helps, send them to yourself, or have Corie look at the same scenario and tell you what she would change.

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Questions people ask

What is a one-time-close construction loan?
A single loan and single closing covering the lot, the construction draws, and the permanent mortgage. You don't re-qualify or pay closing costs twice.
Can I use land I already own as my down payment?
Usually yes, the equity in your lot can count toward the required down payment, sometimes covering it entirely.

Estimates for education only, not a loan approval, rate quote, or commitment to lend. Actual figures depend on credit, property, program guidelines, and market conditions at the time of lock. Corie Adams · NMLS #1875205 · Network Funding, LP · NMLS ID #2297 · Equal Housing Opportunity.

In plain English

It models the financing across both halves of a build: draws during construction and the permanent loan after.

When to use it

  • You are choosing between a one-time close and two separate closings
  • You need to plan payments during the build
  • You are estimating how long you will carry two housing costs

Common mistakes

Assuming payments start after move-in
Interest on drawn funds begins during construction.
Overlooking the second closing
Two-close structures mean a second set of costs and a second rate exposure.
Ignoring build delays
Every additional month is another month of interest and, often, of rent.

Recommended next steps

  1. 01Build the full project budget
  2. 02Get Pre-Approved

Turn the estimate into real numbers.

A pre-approval replaces the assumptions above with your actual income, credit, and the terms available to you today.

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