Construction Loans Construction Loans

How a Construction Loan Works

Once you've identified the land you want to build on, have plans to purchase it and have finalized design plans, you can apply for a construction loan. Once you apply, we'll appraise your new home's designs and qualify you for the loan. Then:

• We set up a draw schedule

  This establishes checkpoints for when we'll disburse funds to your builder. Typically, new builds have 4 to 6 scheduled draws for milestones in the building process, such as the completion of the foundation, framing of the home, etc.

• The builder begins work on your home.

  Every time the builder reaches an established checkpoint in the draw schedule, your home will be inspected.

• The builder finishes your home.

  After the builder has completed your home (or renovations), we'll schedule a final inspection and/or appraisal.

• You refinance to a standard mortgage.

  While your home is being built, you'll only pay interest on your construction loan. As your new home nears completion, you'll apply for a new loan based on current market rates.