Understanding Construction Loans

Construction loans are different than loans for buying existing houses. Did you know that you can combine your land and home in one loan, or that with a construction-to-permanent loan you may save money by locking in interest rates  before construction starts for the life of your loan?

During construction you only make interest payments once a month and you only pay interest on what is dispersed. With construction loans, a draw schedule is a disbursement schedule for the construction of your home. Lenders use the draw schedule as a timeline to pay the builder over the course of construction. For example, when the foundation is complete, under roof, after drywall, trim and cabinets, and after final completion. The mortgage lender completes their own inspections in conjunction with the draw schedule. Schumacher Mortgage uses the latest technology to streamline the time between completion of each phase and inspection so that your project stays on schedule.  To learn more about construction loans and what you will pay for a construction loan, read the article in Custom Building.