CONSTRUCTION LOANS
Build the home you actually want.
A construction loan pays for building a new home in stages as the work gets done. When the home is finished, the loan becomes, or is replaced by, a regular mortgage. I help you plan the financing before you break ground, so there are no surprises halfway through the build.
How a construction loan works
1
Plan and budget.
We review your builder's plans, costs and timeline, plus your own budget.
2
Approval.
The lender approves you, your builder and the project, based on the home's expected value when finished.
3
Draws during the build.
Funds are released in stages as each phase is completed and inspected.
4
Move-in and permanent loan.
Once the home is done, you move into a long-term mortgage with a regular monthly payment.
Construction loan options
One-time close.
One loan and one closing cover both the build and your long-term mortgage, so you lock in your terms up front and avoid a second set of closing costs.
Two-time close.
A short-term construction loan for the build, then a separate mortgage once the home is finished. This can give you more flexibility to shop your final loan.
Renovation loans.
Finance a home and its updates together, or remodel the home you already own, with the work paid for as it's completed.
What to have ready
A signed contract with a licensed builder
Plans, specifications and a detailed cost breakdown
Information about the lot, if you already own it
Your income, asset and credit documents
Common questions
Can I use my land as part of my down payment?
Often, yes. If you already own your lot, its equity may count toward what you put in.
Do I make payments during construction?
Usually you pay interest only on the money released so far. Full payments start after the home is finished.
What if the build goes over budget?
Plan a cushion for overruns. Lenders review the budget closely up front, and there is also a contingency reserve added to the loan for this reason.