If you’re looking to build a brand-new home on a lot you own, a bridge-to-permanent loan from Titan Funding of Boca Raton, Florida, could be the perfect loan for you. Bridge-to-perm loans, also known as construction-to-permanent loans or single-close loans, provide all the funding for construction costs and the permanent mortgage. The main benefit is that there’s only one closing. You don’t have to do separate closings for the construction and the mortgage, so you only have one set of closing costs. Most people are familiar with a standard mortgage loan, but only a few know about construction loans. And regardless of how excited you are about building your new home, the process of funding it can be overwhelming with many unknowns. You can get two different types of construction loans. Your first option is to get a stand-alone construction loan. This is a loan that only covers your construction costs, and once the construction is complete, you need to get a separate mortgage loan. The second type you can opt for is a bridge-to-perm loan or construction-to-permanent financing, which consists of two loans in one with one set of closing costs. Initially, the loan covers construction costs, and then when it’s complete, it converts to a traditional loan. Receive More Info About Our Bridge-to-Perm Loans Lenders pay out a conventional loan in one lump sum, but they pay construction loans in smaller increments, known as draws. You receive these throughout the construction process. When you take a draw, you then give it to the builder to pay for the construction costs. The draw is a reimbursement, so you or the builder must cover the cost upfront. Before you take a draw, the lender orders an inspection to estimate the potential cost and to ensure the process is progressing as planned. When the builder completes the construction, the total cost passes down to the borrower. You can also use a construction loan or a home equity line of credit (HELOC) to improve your home. There are several differences between these two types of loan. First up, a HELOC is a line of credit extended against the equity in your home. It’s a fixed-interest rate loan, with a term usually in the 15- to 30-year range. On the other hand, a construction loan is only over a few years and will have higher interest rates and payments due to the shorter term. However, the overall interest cost will be much lower for a construction loan than a HELOC because the term for a construction loan is so much shorter than a HELOC. Statements, inspections, draws, and disbursements are all things you’ll need to get through in the construction phase. First, you’ll receive disbursements or draws, which are the same thing referred to by different names. Before you receive a disbursement or draw from your loan funds, the lender will order an inspection to check on the construction progress. As mentioned previously, you, or in some cases, the builder, will have to pay for construction costs upfront. You can then use the disbursement to reimburse you for costs, such as labor and materials. Once you submit a draw or disbursement request, the funds are usually available within a few days. When you close the loan, you then follow a draw schedule, and you can contact your lender to order an inspection to check to make sure the work done matches the schedule. You can also use the inspection process to ensure that the workmanship is of good quality. Finally, every month after the initial draw or disbursement, you’ll get monthly statements delineating the interest accrued and the amounts disbursed to date. Typically, the construction loan portion of the financing has a term of a few months up to a couple of years. Once the builder completes construction, all draw periods and disbursements conclude, and all parties receive their reimbursement, the construction process finishes, and the conversion will begin. You need to schedule a final inspection to ensure all building codes have been adequately met. The inspector will issue a certificate of occupancy after the inspection is passed. If you got a construction-only loan, you’d have to search for a mortgage. But in this case, with a bridge-to-perm loan, you’ll already have a loan conversion in place. Next up, you’ll need to schedule an appraisal. A professional appraiser will evaluate the property and compare it to recent sales in your area to assess the value of your home. If there aren’t many comparable properties in the area, it can be tough to appraise your home. The appraisal is critical to securing the conventional mortgage as it’s collateral for the loan. Now it’s time for the lender to approve the mortgage. You already have the permanent financing in place, and once the appraisal checks out, you’ll begin to make payments on your permanent mortgage. When you’re ready to start the process of applying for a loan, reach out to the team at Titan Funding in Boca Raton, Florida. Our experts can go over the bridge-to-perm loan options available to you, answer any questions you might have, and guide you through the process. You can reach us on 855-928-0737 from 9 a.m. to 6 p.m. Monday through Friday, or fill out our secure online contact form 24 hours a day, seven days a week.
When the property is under construction, your payments will be interest-only, and your lender will conduct regular home inspections to check progress. Once you close on the loan, you can use your down payment to fund the beginning of the construction. When you’ve exhausted your down payment, you can start to draw funds from your bridge-to-perm loan. Then, when you’ve completed the construction, you’ll begin paying your standard mortgage.Construction Loans
How To Use Your Loan To Cover Construction Costs
Home Equity Line of Credit Versus a Construction Loan
The Construction Phase and How It Works
Converting a Construction Loan to a Permanent Loan
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Frequently Asked Questions - FAQ
TL;DR: Bridge‑to‑permanent loans (construction‑to‑permanent loans) offered by Titan Funding combine short‑term construction financing and long‑term mortgage financing into a single loan with one closing. Borrowers pay interest‑only during construction, then convert to a standard mortgage once the project is completed and passes inspections.
What is private money lending?
Private money lending refers to financing provided by individuals or non‑bank entities for real‑estate investments. These loans are asset‑based rather than credit‑based and usually have short terms with higher interest rates compared with traditional bank loans.
How do I qualify for a real‑estate investment loan through Titan Funding?
Titan Funding evaluates the property’s value and the loan‑to‑value ratio rather than focusing on credit scores. Maintaining an LTV around 60 % and providing a clear plan for the investment increases your chances of approval.
What documents are needed for hard‑money loans?
Documentation typically includes proof of property ownership or purchase contracts, appraisals, and, for construction loans, detailed plans and budgets. Because underwriting is asset‑based, credit documentation is less critical than in conventional lending.
How quickly can I get funded for a property in Florida?
Titan Funding’s underwriting process usually takes about 48 hours, and approved borrowers can receive funds within four days for hard‑money, rental or bridge loans. Some commercial bridge loans provide funding in as little as 10 days.
Does Titan Funding lend to foreign nationals?
Yes. Titan Funding offers hard‑money programs for non‑U.S. citizens seeking to buy or refinance property in South Florida, using asset‑based underwriting to bypass conventional loan barriers.
What types of loans does Titan Funding offer?
The company provides various short‑ and long‑term real‑estate loans, including hard‑money and bridge loans, residential and commercial bridge loans, multifamily financing, fix‑and‑flip loans, rental property loans, ground‑up construction loans, bridge‑to‑permanent loans and cash‑out refinance options.
How does LTV work in real‑estate loans?
Loan‑to‑value ratio is calculated by dividing the loan amount by the appraised value of the property. Lenders, including Titan Funding, set maximum LTV thresholds (often around 60 % for hard‑money loans) to manage risk.
Which states does Titan Funding serve?
Titan Funding primarily serves Florida but may authorize loans in other states on a case‑by‑case basis. Applicants can discuss their specific property and location with the company’s professionals.
How do I calculate return on investment (ROI) for fix‑and‑flip projects?
ROI is determined by subtracting total costs (purchase price, renovation expenses, loan interest and fees) from the final sale price, then dividing the result by total costs. Titan Funding’s guide on calculating fix‑and‑flip ROI emphasizes factoring in loan terms and interest to evaluate profitability.
What are the risks of hard‑money loans?
Hard‑money loans carry higher interest rates (often 10 %–15 %) and points compared with traditional financing. They are short term, so borrowers need a clear exit strategy and must account for appraisal and origination fees in their budgets.
What is a bridge‑to‑perm loan?
A bridge‑to‑permanent loan, also called construction‑to‑permanent or single‑close financing, funds construction and the permanent mortgage in one package. Borrowers only close once, which reduces overall closing costs and simplifies paperwork.
How does payment work during construction?
During construction, payments are interest‑only, and lenders perform regular inspections to monitor progress. Borrowers use their initial down payment to begin construction and then draw funds from the bridge‑to‑perm loan as needed.
What happens after construction is complete?
When construction is finished, the loan converts automatically to a traditional mortgage. The borrower begins making principal and interest payments according to the permanent loan terms.
How does this differ from a stand‑alone construction loan?
With a stand‑alone construction loan, borrowers must secure a separate mortgage after construction is complete. Bridge‑to‑perm loans avoid a second closing by combining both phases.
What is involved in the draw process?
Borrowers receive funds in draws throughout construction; each draw is preceded by an inspection to estimate costs and confirm work progress. Draw schedules ensure that funds are released only when milestones are met.
How can Titan Funding assist with bridge‑to‑perm loans?
Titan Funding guides borrowers through the process, explains available options and assists with both the construction phase and the mortgage conversion. Prospective borrowers can contact the team at Titan Funding for personalized advice and to start an application.