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This is a standard loan for real estate purchases in Florida that is disbursed at the same time as the closing. It allows buyers to provide the necessary funds to purchase a property. This loan can be offered by different lenders such as banks or credit unions and can include different loan products such as fixed-rate or adjustable-rate mortgages.
In Florida, construction financing runs from the start of construction to the end of construction, so it is, strictly speaking, interim financing. Payment is made in accordance with the contractually agreed construction phases. Commitment interest is not charged. Interest only accrues on the amount paid out.
Perm stands for “permanent” and this explains the character of this type of financing. A so-called “C/P loan” is construction financing that is automatically replaced by final financing when construction is completed. When the construction is completed, a “mini” closing takes place, during which the last installment is also paid out to the construction company. The final financing begins with this mini-closing, and only then do the regular interest payments take effect for the rest of the term.
This represents a classic refinancing. In Florida, you choose this type of financing if you have an existing loan but want a better interest rate, a different term or a completely different loan model. The new loan is paid out simultaneously with the deletion of the old mortgage.
This type of financing is recommended if you already own a property in Florida, but it is still or again unencumbered (“free & clear”). Regardless of whether you want to buy a new property, afford a new boat, or want to bring the money to Europe: The intended use does not matter, your property will be mortgaged and the money will be paid directly to you in the form of a bank-guaranteed check or transferred to an account specified by you.
