Construction loans are short-term, interim loans used for new home construction, including land, contractor labor, building materials, permits and more. With these loans, the contractor receives disbursements as work progresses. There are several construction loans designed to fit nearly every new home construction need. Some options include construction-only loans and construction-to- permanent loans, where the loan is used for the construction of the home and then converts into a permanent mortgage loan.

Construction loans are short-term loans that cover the cost of building a new home. These loans are usually shorter in duration and proceeds are paid directly to the contractor in installments, or “draws,” as building milestones are achieved. An inspection is typically required before each payment is released to the contractor. To learn more about how construction loans work, connect with your mortgage loan officer.

If you’re considering a construction loan, there are a variety of qualifying factors, including but not limited to, credit score, debt-to-income ratio and credit history. Contact your mortgage loan officer to see if you qualify for a construction loan.