What is a Construction-to-Permanent (CTP) Loan?
Often, getting approved for a construction loan at most banks can be tricky. In many cases, two loans are required--one for construction and one for permanent financing. Usually you will have to pay closing costs on both loans, not to mention the extra paperwork, time and hassle involved. But at RAD Financial, we offer a single-close Construction-to-Permanent Loan that combines both construction and permanent financing into one loan.

A Construction-to-Permanent Loan allows for a construction period of 6 to 12 months sometimes more. Other options are also available. And when your project is complete, the loan simply converts to a permanent mortgage – no extra costs!

You only need to qualify one time.
Only having to chase down documentation once compared to the typical process where the customer is qualified; the builder builds the home, then the lender requests documentation all over again to make sure the customer still qualifies.

With the CTP loan, having qualified at the beginning of construction, the customer can shop for new furniture, buy a new car, change jobs, whatever they choose because they are already approved and do not need to be approved all over again 6 months to a year later!

To help you manage your budget a little easier, you'll pay only interest on the money you've drawn. That means your payments will be less than they will be if you were paying principal, as well.

Disbursements to the contractor.
The builder will be paid as quickly as he can build the house. There are generally 4-6 disbursements made during the course of construction, although more disbursements can be set up on larger projects, fewer on smaller ones.

As each level of construction is completed, an inspector will come out and verify the work. Within 3-5 days of his verification, the funds are over-nighted or wired to the builder’s account.