Construction Loans

If you want to build your own home and you have started the research, you have probably come to learn that building a home comes with many challenges, particularly where financing is concerned. When you build your own home, you can choose everything from the space and style to the features and upgrades in your home, but it all begins with choosing the right type of financing.

Construction loans are specialty loan products that can be used by home builders and home buyers. This type of loan differs from a regular mortgage in that it is short-term and it requires repayment after the home construction is complete. Funds are usually released to the home builder, who uses the funds as necessary throughout construction. In most cases, you will make interest only payments during construction, and the loan becomes due when you receive your certificate of completion. The majority of construction loans today have a variable interest rate.

Construction Loan Options

Summit Funding offers several types of construction loans, each with varying features to best match your situation. The most popular feature among borrowers is the ability to roll the construction loan into a standard mortgage. This option means you pay closing costs just once.

This type of loan is known as construction-to-permanent financing, and it will turn your construction loan into a regular home loan as soon as the certificate of occupancy is issued. In most cases, you will get a 30-year mortgage, with the option to look for a different mortgage later if you want.