One-time close products often let you lock a rate — or a construction-plus-permanent structure — for a set period covering the build, with float-down options varying by lender. Two-time close files carry separate construction and permanent rates; you typically lock the permanent rate near the end of construction. Long builds may need extensions, and two-close borrowers face market risk if rates rise.
On a one-time close construction-to-permanent loan, many lenders let you lock the permanent rate at closing — or within a defined window — for a period long enough to cover the build. That protects you from rate increases during construction, though float-down provisions if rates drop vary.
Two-time close borrowers face a different picture. The construction loan has its own short-term rate — often adjustable or interest-only. The permanent mortgage rate is locked separately, usually when you apply for the take-out loan near completion. If rates rise during your build, your permanent payment could exceed original projections.
Long builds may outlast your lock period. Extensions are sometimes available for a fee. Ryan and Steve align your lock strategy with the builder timeline and compare one-time vs. two-time close options for your situation.
The product you choose determines when and how you lock.
Lock the permanent rate — or a combined construction/permanent structure — at or near your initial closing. The lock period must cover the expected build duration. Float-down options may let you capture a lower rate if the market improves before conversion.
The construction-phase loan carries its own rate, often short-term and interest-only. This rate is separate from your permanent mortgage and reflects current construction lending terms at the time you close the first loan.
You apply for and lock the permanent rate when construction nears completion — typically 60 to 90 days before the Certificate of Occupancy. Market conditions at that moment determine your long-term payment.
If your build runs long, a one-time close lock may expire before conversion. Extension fees or re-locking at current rates are possible outcomes. Ryan and Steve monitor lock dates against builder progress throughout the project.
Know when your rate is set and what happens if the build runs long.
Step 1
One-time close: lock permanent rate if your product allows. Two-time close: construction rate is set; permanent rate is still open.
Step 2
Construction interest accrues on drawn funds. Monitor lock expiration dates against builder milestones.
Step 3
Two-time close: apply for permanent financing and lock your long-term rate. One-time close: prepare for automatic conversion if lock is still valid.
Step 4
Home completes within the lock window — loan converts smoothly. If not, explore lock extensions, float-down, or re-lock options with Ryan and Steve.
Compare close types, payment timing, and whether construction fits your goals.
Single closing from construction through permanent financing.
Separate construction and permanent closings explained.
Interest-only during build vs. full P&I after conversion.
Good-fit scenarios and program comparison.
2MG Daily
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Many one-time close products let you lock a rate — or a construction-plus-permanent rate structure — for a set period that covers the build. Float-down options vary by lender. Long builds may need a lock extension, which can carry a fee.
On a two-time close, the construction loan rate and the permanent mortgage rate are separate. You typically lock the permanent rate near the end of construction when you apply for the take-out loan. If rates rise during the build, your permanent payment could be higher than projected.
Lock extensions may be available for a fee, or you may need to re-lock at current market rates. Ryan and Steve track your lock expiration against the builder timeline to avoid surprises at conversion.
No. Rate locks are subject to program terms, lender overlays, and completion within the lock window. All loans remain subject to credit, income, and property approval. This page is educational — contact us for current lock policies.
Ryan & Steve walk through one-time close vs. two-time close rate strategies — including lock periods, float-down options, and extension rules — so you know your payment before you break ground.