A construction loan finances the cost of building a home rather than buying an existing one, with funds released in stages ("draws") as the builder completes each phase. Many construction loans are "construction-to-permanent," automatically converting into a standard mortgage once the home is finished.
Generally a good fit if you...
- Are building a new home rather than buying an existing one
- Already have a builder, plans, and a lot lined up (or are close to it)
- Want one loan that carries through from groundbreaking to move-in, rather than two separate closings
General guidelines
- Funds release: paid out in draws tied to construction milestones, not as one lump sum
- During construction: you typically pay interest only on the funds drawn so far
- Down payment: generally higher than a standard purchase loan
Building rather than buying? Let's talk through financing it.
Every situation is different, and these are general guidelines — the fastest way to know where you stand is a quick conversation. Send us a message or visit our team page to apply directly.