How does a construction loan work?
A construction loan usually last about a year and combines your lot and construction financing into one loan. When construction is complete, we modify it into a permanent mortgage.
What properties are eligible for construction?
We finance both primary and secondary residences for construction mortgage loans.
What is the construction mortgage process?
First you will need to determine if your property is eligible and ensure you’ve selected a licensed builder to construct your home. Once you’re ready to start on your mortgage, contact us, we will need a copy of your construction agreement, the land contract for your lot (if applicable), a copy of the floor plan (if applicable) and a deed to the lot (if applicable). Next we will close on your loan and funds can be drawn as work progresses.
How do we access the funds?
Funds are disbursed as work is completed and are handled by a title company based on progression of the build. The number of draws can vary – typically there are around four during the building process.
What do I need to bring to closing?
You will need enough cash to cover the closing costs and the minimum down payment.
Payments and interest
While your home is being built, you will pay only the monthly interest on the construction loan. The construction rate is protected through the 12 month construction phase.