USAA construction loans
USAA offers VA loans, which can be used for home purchases as well as new construction. A USAA construction loan lets you pay for the lot and construction, then roll the balance into a mortgage once the home is completed.
Keeping this in consideration, can I roll a construction loan into a mortgage?
A construction-to-permanent loan is a construction loan that converts to a permanent mortgage once building is completed. With this type of loan, all your financing is rolled into a single transaction, meaning you’ll only have to complete one application and go through one closing process.
Additionally, does VA do construction to perm loans?
With a VA One-Time Close Construction-to-Permanent Loan, eligible service members can take advantage of the simplified loan program that allows them to finance the construction, lot purchase, and permanent mortgage, all with a single loan.
How do construction loans work when you own the land?
Put simply, if you already own land, the equity that you have in that land can be used as your down payment for your construction loan.
To get a construction loan, you’ll need a good credit score, low debt-to-income ratio and a way to prove sufficient income to repay the loan. You also need to make a down payment when you apply for the loan. The amount will depend on the lender you choose and the amount you’re trying to borrow to pay for construction.
VA construction loans are short-term loans that will help you cover the costs of constructing a special home. And instead of receiving one upfront payment, VA construction loans only pay for the portion of your home that’s completed.
Under normal circumstances, initial underwriting approval happens within 72 hours of submitting your full loan file. In extreme scenarios, this process could take as long as a month. However, it’s unlikely to take so long unless you have an exceptionally complicated loan file.
Construction to permanent loans are also easier to qualify for than stand-alone construction loans. A construction loan is riskier for a lender because there is no existing home they can use as collateral if you can’t pay back the loan, so the borrower has to meet a lot of eligibility requirements.
USAA doesn’t offer any other loan types. You can’t apply for a conventional loan for a home purchase. Also, you can’t get an adjustable-rate mortgage from USAA right now. This is primarily because mortgage rates are low enough that ARMs don’t offer financial advantage over a traditional fixed-rate mortgage.