What is a CTP Loan?
A Construction-To-Permanent (CTP) loan is the most common type of new construction financing. At AnnieMac, we specialize in CTP loans with a department that's fully dedicated to them. We are able to do CTP loans using conventional, FHA, VA and USDA financing. All of these options have different qualifications including different down payment amounts, credit score requirements and loan-to-value ratios.
What are the Benefits of a CTP Loan?
Building a home requires capital. If you do not have the capital, you will have to secure a loan. However, banks do not offer long-term financing for building a home. What they do offer is called a construction loan. When you take out a construction loan, you have two options -- you can take a CTP loan or a stand-alone construction loan.
A CTP loan transfers from a construction loan to a permanent loan at the time the home is completed. It is also a one-time close for this type of loan. This means you are only paying for closing costs once.
If you opt for the stand-alone construction loan, it is up to you to find permanent financing when your home is built. This type of construction loan will likely carry a balloon payment, which you must pay at the end of the term. Construction loans usually have terms for 12 months or less.
New Homes are More Affordable Than you Think
Before you write off the possibility of building your own home because of the expense, you should look into the discounts available. Depending on the time of year as well as the phase the builder is in at the time, many builders offer incentives for new home purchases. There are different ways of building as well that make it more affordable, such as modular homes vs. stick built. Another option is manufactured homes.
Rather than focusing on cost alone, consider the pros and cons of building your own home. Unless you find an existing home with the exact features and layout you want, building is often very beneficial. A home is often the largest investment you make in a lifetime, so your happiness with the outcome should play a role in your decision. Don’t forget to consider the cost of repairs and replacements you may need to make to an existing home. Comparing the “true” cost of purchasing an existing home to the cost of a new home can help you make the choice that is right for you.
AnnieMac’s construction team is solely dedicated to construction loans. As a lender who specializes in CTP, we are able to insure that your loan is handled correctly and that the process of building your new home will be an easy one. This type of loan can be tricky for lenders who do not have experience with them, which is why we made it our goal to become industry experts in construction loans. With years of experience, AnnieMac will provide you with a stress-free experience as you build the home of your dreams.