Construction Loans vs. One-Time-Close Loans in Beaufort SC: The Complete 2025 Homebuyer Guide

Building a Home? You Have Two Financing Options

Every home build in Beaufort, South Carolina, requires the right type of financing. Most buyers choose between two main paths: the traditional construction loan, often called a two-time-close loan, and the one-time-close construction-to-permanent loan.

Both options can be managed through your mortgage broker. The Beaufort Lending Team, led by Benji Gecy, helps clients through every step, from builder approval and land financing to the permanent mortgage, ensuring your loan fits your long-term goals.

What Is a Construction Loan?

A construction loan provides short-term financing that pays for your home’s build in stages. According to Bankrate, these loans typically last six to eighteen months and require interest-only payments during the building phase.

You will have two closings: one for the construction phase and another for the permanent mortgage once the home is finished. During the second phase, your broker can review market conditions and help you find the best long-term mortgage option. This process keeps your project and budget on track while maintaining flexibility if rates improve later.

What Is a One-Time-Close Construction Loan?

A one-time-close loan combines your construction and permanent mortgage into a single closing. Zillow explains that these loans allow you to lock your interest rate before construction begins and require just one set of fees, one appraisal, and one closing.

When the home is complete, the loan automatically converts to a standard long-term mortgage. This simplifies the process, reduces paperwork, and eliminates the need to requalify once construction is done. Many Beaufort homebuyers prefer this option for its convenience and predictability.

How the Draw Process Works

Both types of loans use a draw schedule to fund construction in phases. Builders are paid as key milestones are completed, such as the foundation, framing, mechanical systems, and final finishes. The lender releases funds after each inspection verifies that the work meets requirements. You pay interest only on the funds that have been drawn, not on the full loan amount.

Your mortgage broker coordinates with your builder and lender to keep draws on schedule and inspections on time, ensuring a smooth build from start to finish.

Comparing the Two Options

Bankrate notes that while two-time-close loans offer flexibility to shop for a new rate after construction, one-time-close loans help borrowers avoid surprises if rates rise during the building period.

The Broker Advantage: Guidance Through Every Phase

Your mortgage broker serves as your guide throughout the entire process. From application to inspections, your broker ensures your loan stays compliant and efficient. They help manage builder communications, oversee funding, and transition you seamlessly into your final mortgage.

Beaufort Lending’s local experience helps buyers navigate regional rules, zoning, and builder approvals. Clients benefit from fast closings, transparent communication, and rates often about 0.5% below the national average.

How to Qualify

To qualify for a construction or one-time-close loan, lenders generally look for the following:

• Credit Score: Most programs require a score between 620 and 680.
• Down Payment: Typically 10% to 20% of the total project cost. Some government-backed options may allow lower down payments.
• Approved Builder: The lender must approve your builder before funding begins.
• Project Plans and Budget: Detailed blueprints, timelines, and cost breakdowns are required before closing.
• Land Equity: If you already own your lot, its value may be used toward your down payment.

Your broker will help prepare your documentation and present it to the lender for underwriting, reducing delays and stress during approval.

Local Insight for Beaufort, South Carolina

In Beaufort County—home to communities like Port Royal, Lady’s Island, and Burton—construction loans are popular for custom homes and coastal builds. Brokers often connect local banks that handle draws with national lenders that provide permanent funding, streamlining approvals and inspections.

Zillow reports that construction loans can cover the entire building process, including land purchase and labor costs, which makes them ideal for Beaufort’s growing housing market in 2025.

Real-World Example

Ben and Ashley built a $500,000 home near Beaufort’s Battery Point. Their broker arranged a one-time-close loan, locking their interest rate before construction started. Throughout the draw process, the same broker managed inspections and fund releases. Once the home was finished, the loan converted to a 30-year fixed-rate mortgage with no requalification required.

FAQs

Do I make payments during construction?

Yes. You make interest-only payments on the funds drawn during construction. (Bankrate)

Can I use my land as a down payment?

Yes. If you already own your lot, the land’s equity can count toward your down payment or project costs. (Zillow)

What happens if my project takes longer than expected?

Most lenders can extend the construction phase if delays occur, but you may need to update inspections or documents. Your broker will help you handle these adjustments efficiently.

Final Thoughts: Stay with One Trusted Mortgage Expert

Both construction and one-time-close loans fund your build through draw schedules and lender inspections. The main difference is how and when your permanent mortgage is finalized. With Beaufort Lending, you have a trusted broker who manages every phase—from your foundation pour to the final closing—ensuring your financing stays simple and stress-free.

Call 843-524-2404 or chat 24/7 for an instant rate quote at https://m.me/100195949793281?ref=w30500354 - Opens in Messenger. You can also use the mortgage calculators to estimate your budget before you build.