"I'm considering buying a piece of property and having a new home built. What are my financing options? Can I get one loan for both the construction and the future mortgage?"
You have several different options in terms of loans, payment schedules, locking in a rate, etc. Most lenders offer two basic types of loans for new construction. The first is a sort of two-loan system in which the borrower has one short-term loan for the construction and then a long-term loan for the actual mortgage. Usually, the borrower pays only the interest on the construction loan and then gets a second loan to pay off the construction loan. Although having two loans—and two closings—can be a bit much to deal with, the borrower is able to use two different lenders and possibly get a better deal on the second loan if the rates drop. The second type of construction loan is called a construction-to-permanent loan and is more of a two-in-one loan. Unlike the first type, a construction-to-permanent loan has only one closing (and only one set of closing costs) and often costs less overall. Nowadays, construction-to-permanent loans are extremely popular due to the flexibility of when a borrower can lock in a rate and the fact that most lenders allow borrowers to not make payments during construction. Since both types of construction loans can vary from lender to lender, you should always consult with your mortgage pro @ your local Bank.