What Is Construction-to-Permanent Loan?
A construction-to-permanent loan finances the building of a custom home in stages as work is completed, then automatically converts into a standard mortgage once construction finishes.
Why it matters
This avoids the cost and hassle of two separate closings — one for construction financing, one for the permanent mortgage — that a construction-only loan would require.
Related Terms
More New Construction Terms
This definition is provided for general educational purposes and is not financial, legal, tax, or real estate advice. Verify important decisions with appropriately qualified professionals.
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