Home financing that easily converts from a construction loan to permanent financing.

Is the Construction-To-Permanent program right for me?

Building or renovating a home may be one of the largest projects you will ever undertake. Merrill Lynch’s Construction-to-Permanent home financing program offers a smooth transition from construction to permanent financing with only one application and one closing - saving you both time and money.

In most cases, custom-built home construction takes from 12 to 18 months. During this time, you will receive disbursements of funds to pay your builder for labor and material costs. Each month you will be required to pay only the accrued interest on the outstanding balance.¹ Once your home is complete, your loan automatically converts to the permanent mortgage you selected during the application process.

What are the features of the Construction-To-Permanent program?

• Financing for new home construction and major renovations from $100,000 to $3 million.²
• Available for owner-occupied primary residences and qualified second homes.
• Only one set of closing costs; one-point origination fee.
• No prepayment penalties.
• Protect or lock your rate with our optional mortgage feature that offers the safety of a guaranteed maximum interest rate, even if mortgage rates rise before you close your mortgage. (Ask your Merrill Lynch Financial Advisor or Loan Consultant for more information.)

The Construction Phase features:

• Eighteen-month construction period, upon approval of Merrill Lynch, may be extended up to an additional six months with an interest rate margin increase.
• Interest-only payments at the prime rate, based on utilization.¹
  

The Permanent Phase mortgage options include:

• Adjustable-Rate mortgages.
• Fixed-to-Adjustable-Rate mortgages.

Are there any special considerations with the Construction-To-Permanent Program?

• Land must be owned by borrower or included in the construction sales contract.
  
• The borrower must have selected a builder acceptable to Merrill Lynch.
  
• Final plans and specifications must be approved by both the builder and borrower, and are subject to Merrill Lynch review.

¹The construction period requires interest-only payments based on the Prime Rate as quoted in The Wall Street Journal,
minus .50%. Six-month extension permitted with interest rate margin increase and lender approval.

This is an “interest-only” mortgage that allows you to pay only the interest on the money you borrow for a certain number of years. If you only pay the amount of interest that’s due, once the interest-only period ends, you will still owe the original amount you borrowed and your monthly payment will increase – even if interest rates stay the same – because you must pay back the principal as well as interest. You should ask what the payments on your loan will be after the end of the interest only period. If you are considering an adjustable-rate mortgage, ask about what your payments can be if interest rates increase.

²Loan amounts over $3 million available on a negotiated basis.