To build, buy, or refinance. Call our experts at: phone icon1-844-422-3622

Military & Veteran Home Loan Refinancing Resources

Members Switch to AMS to Pay Off Their Construction Loan


Patrick and Denise Hannigan, both former federal law enforcement agents, found their perfect retirement spot in Havelock, North Carolina, along the Neuse River. The two avid sailors wanted to move from Annapolis, Maryland, so that Havelock would be “five days closer to the Bahamas,” notes Patrick, “and stay a lot warmer in the winter.”

Patrick retired from the Army in 2014 as a Sergeant First Class. Over his 27-year military career, he worked as a special agent in the Army’s Criminal Investigation Division both overseas and in the greater DC area, and in the Army Reserve. After separating from the military, he worked as a federal agent in the criminal investigation unit at the Food and Drug Administration, which is where he and his wife Denise met.

Their plan during retirement is to sail as much as possible. So the Hannigans sold their Annapolis home and purchased a one-acre waterfront lot in 2021 in a custom-home community. They also found a dock for their boat nearby, where they could live while their home was being built.

Because mortgages can only be used to finance already-built homes, they needed to take out a construction loan for the new build.

Financing Construction

A construction loan works more like a line of credit than a mortgage. Instead of the seller getting all of the money at once, money is drawn by the buyer as needed (such as when construction reaches a certain phase of completion), and the buyer only pays interest on the amount drawn.

The term for a construction loan is normally 12 months, but extensions are available.

Because construction loans are considered more risky by lenders, they typically carry higher interest rates than mortgages, and there are often other lender requirements, including who can build the home, periodic inspections, and having to submit construction plans for approval. Once the home is built, the loan can be converted into a mortgage, or the borrower can refinance to pay off the construction loan and take out a new loan.

As the construction on the Hannigans’ new home was nearing completion, they reached out to Intercoastal to discuss converting the loan. “There was a lot of back-and-forth on what the interest rate would be on the new loan and, ultimately, Intercoastal offered us 7.5%, which we thought was too high,” says Patrick. “We felt we could do better than that.”

Shopping for a Better Rate

The Hannigans initially contacted Navy Federal Credit Union, which they’d previously used for a home loan, to take out a mortgage. “We were shuffled to a few different contacts there and weren’t feeling comfortable with how we were being treated,” says Denise.

About that time, the Hannigans received an email from AAFMAA Mortgage Services LLC (AMS). Patrick had joined AAFMAA when he was still in the military for its insurance products and was surprised to learn that the mortgage subsidiary of AAFMAA offers construction loans. The Hannigans clicked the email link to provide AMS with some basic information.

AMS Military Mortgage Advisor Sarah Wilson, who works in the Morrisville, North Carolina branch, promptly called them. “From the very beginning, we worked with Sarah as our single point of contact, and she was just amazing,” Patrick says. “I can’t say enough about her commitment and work ethic. It’s so nice to talk to a person who’s responsive and helpful, and not be dealing with chatbots and multiple handoffs.”

Related: VA Home Loans Don’t Require a Home Inspection, But Getting One Is a VERY Good Idea

Working with AMS

The Hannigans received loan estimates from both AMS and Navy Federal. The loans were similarly priced, but AMS offered a slightly lower interest rate, at 6.25. “We were leaning toward AMS when, at the 11th hour, Navy Fed reduced some fees and matched their rate. Even so, we were so impressed with Sarah and AMS that we didn’t mind paying a few hundred dollars more to work with them,” says Patrick. “AMS would also let us lock in the rate, which was a huge advantage since the completion of our home kept being pushed back, and rates were rising,” he says.

What ultimately swayed their decision to choose AMS was the excellent customer service they received from Wilson. “She was always there to answer every question if there was anything we needed clarity on, and she worked hard to get us the best interest rate possible,” adds Denise. “Through many emails and telephone calls, she built a personal relationship with us.”

They closed on their home loan in late October 2023. They’re glad to be living in the larger space and grateful to AMS for helping them close on time and with the agreed-upon rate. “My advice to anyone shopping for a mortgage, would be to make AMS a ‘must stop’ on their journey,” says Patrick.

We’re Here to Help

Whether you’re thinking about buying, ready to start home-shopping in earnest, or considering a refinance, an AMS Military Mortgage Advisor will be happy to provide you with an honest and fair comparison of your mortgage options, including a wide range of affordable mortgages designed to meet your needs.

Ensuring AAFMAA Members obtain the best mortgage possible is our mission. Get your free mortgage assessment today or give us a call at 844-422-3622!