Construction loan rates can vary broadly by VA construction loan lender and product. Construction loan rates are also affected by how long it will take you to build. According to AI research, there is a broad range of construction loan rates offered and these vary by many factors. Here is a list below of factors that affect construction loan rates.
- Your Credit
- Your job stability and history
- Your lender
- Owning land and having equity vs. not having equity
- Economic climate
- Construction period
- Type of construction loan
- One time close construction loan
- Temporary variable rate financing Construction loan and permanent loan after finished
What are the current construction loan rates being offered on the internet right now?
When I research this it seems that there is no one that publishes these rates and the range is drastic. It seems like many websites write about this but don’t do the loans. One may ask, why would they do that? Well, the main reason is to capture your traffic and then sell your information to someone who can do something with your desire for a construction loan. At Security America Mortgage we actually do construction loans. Since rates are always changing and not one size shoe fits all; we customize your construction loan based on your needs.
Is a VA one time close construction loan the same as a VA Construction Loan?
Essentially a VA construction loan should be a VA one time close construction loan. This is the case because you’re closing once on a VA loan to build a house and not getting 2 separate loans. Many lenders advertise content under the false pretense that they provide a VA construction loan but really they only seek your permanent financing with a VA loan.
Have construction loan rates gone up or down in 2024?
Construction loan rates are higher in 2024 than previous years but with Fed rate cuts they should trend downward. Don’t get to caught up in interest rates. Remember that when interest rates are up it’s usually because inflation is up and the economy is doing well. The Fed cuts rates when the economy needs a boost, and the Fed raises rates in times of inflation and growth. It’s possible you will get a better deal on your land when rates are higher because there are less people buying. When rates are higher demand slows down so there is less competition in buying homes and land.
How do construction loan rates on one time close construction loans compare now to earlier in the year?
Construction loan rates were lower in June than now. One may ask how is that possible after Fed rate cuts? Well, for one: The Fed rate cuts influence short term interest rates much more than long term interest rates. That means that if you choose temporary short term financing on your construction loan you might have a lower construction loan interest rate during construction but you won’t have any protection when you eventually lock in your long term interest rate if you choose a fixed rate. However, the impact on fixed-rate mortgages might not be as immediate or significant, as these rates are more influenced by long-term economic expectations.
I asked this same question to Senior Loan Officer Jason Noble and this was his response. “There are a lot of factors, if you want to really dumb it down you say inflation. Inflation continues to rise despite the fake reporting. For example, yesterday CPI MOM came out hotter than expected .2 increase then Core CPI MOM .3 increase both beating market expectations. It’s hard to get people to listen when even dipshits like CNN and Bloomberg write stories that make it seem as inflation is lower and then they use some distant time in the past to compare it to. The fact is we have had 38 months in a row of MOM and YOY inflation.”
What are the construction loan rates at Security America Mortgage?
At Security America Mortgage we are glad to quote you on the interest rate when we know more about your exact situation. We don’t provide variable rate construction financing, and you can use our construction loan calculator to learn more. Our construction loan rates are for only one time close construction loans such as the VA one time close construction loan, FHA one time close construction loan, conventional one time close construction loan and USDA one time close construction loan.
VA Construction loan rates forecast for the remainder of 2024
According to Senior VA construction loan specialist Jason Noble it’s impossible to predict. He believes there will be some improvement by year end. However, remember that when rates are down VA approved builders tend to get busier and construction costs might increase. When it comes to VA Construction loan rates we don’t like to post them on our website because everyday they have a high probability for change in this volatile market. Also, va construction loan rates might change by the time you have a builder, plans, land and are ready to build. Make sure to find a VA registered builder that’s also approved by your VA construction loan lender. For customers to get the best va construction loan rates it will take some luck and planning.
How do va construction loan rates compare to fha construction loan rates and conventional construction loan rates?
VA Constriction Loan Rates, on average, tend to be lower than their counterparts, conventional and FHA. VA has had a long standing price advantage in the mortgage market place for many years, in part is attributed Veteran’s low default rate which poses less risk to lenders and servicers.
FHA Construction Loan Rates are usually second lowest compared to VA and Conventional, FHA Construction Loan rates have a history for offering potential homeowners the ability to have flexible loan terms while offering competitive interest rates. FHA also allows for a loan down payment options and other flexible qualifying criteria.
Conventional Construction Loan interest rates tend to be higher than their counterparts VA and FHA. Conventional Construction loan interest rates can vary based on a number of different factors such as, credit score, down payment, loan amount, loan to value, and many more possible criteria. While Conventional Construction rates can be higher than VA and FHA borrowers may find benefits in the Conventional Construction Loan program depending on their goals.
Construction loan rates with variable financing vs one time close construction loan rates with a 30 year mortgage
When choosing which product is best for you it’s important to weigh out risk. Variable rates are subject to going up and when your home is completed, you’ll still have to get permanent financing. When you choose your permanent financing, you have the option to continue with a variable rate or convert to a 30 year or 15 year fixed rate. Variable rates can be tied to investor indexes such as the LIBOR whereas fixed rates are tied to Ginnie Mae, Freddie Mac, and Fannie Mae bonds. Variable rates might offer a lower up front rate but the big question is will that benefit you 5 months into construction? With a one time close construction loan at Security America Mortgage your interest rate will be fixed from the beginning until the end. That protects you and doesn’t limit you on refinancing later if rates drop enough to materially benefit you.
How a construction loan calculator can help you plan a possible payment based on a hypothetical construction loan rates.
Use our Construction Loan Calculator to plug in important data so that you can forecast your construction loan payment. There are many variables to account for such as if your construction loan covers the cost of land and construction, tax payments, interest payments, insurance payments and more.
Will Construction loan rates rise or fall in the 4th quarter of 2024?
According to AI, Based on current forecasts, construction loan rates are expected to remain relatively stable or potentially decrease slightly in the 4th quarter of 2024. This is due to the anticipated Federal
Reserve rate cuts which could provide some relief to loan issuers.
According to Senior Loan Officer Jason Noble, “No, and anyone who says they do is lying. No one can predict markets accurately, not even the best economists and bond traders. There are just too many factors.” Jason goes on to say that it puts a tremendous amount of extra work load on a loan officer with such interest rate volatility and uncertainty. “My practice is to lock the rate at the time we are ready to move forward and let the client know rates are moving upward I have to redo many fee sheets this week for people looking to buy or about to build so they know. I also prepare them for rates in the mid 6s.”
