Construction Financing

With this option, your construction loan involves only one application and one closing. The loan initially covers construction costs and then transitions to permanent financing. Your one-time construction loan may include:

• An initial loan disbursement to finance the purchase of the land to build on
• Loan disbursements over the course of the construction period to cover construction expenses
• During the construction phase, you may have interest-only payments; we can make scheduled disbursements to your builder during this time
• Once the construction phase expires, the loan converts to a fixed-rate or adjustable-rate mortgage

You can also apply for two separate loans – a short-term construction loan and a long-term mortgage. During construction, you will make interest-only payments, with monthly payment amounts increasing as funds are used. When construction is completed, the mortgage will be considered a loan refinance, which pays off the construction loan.

• Provides flexibility to increase your loan amount due to cost overruns
• Typically has lower modification and underwriting fees compared to a one-time closing loan
• Typically offers lower rates than one-time closing construction loan because you can lock in your mortgage's interest rate after construction