Before you start construction, the most important first step is to have a clear idea of what you want to achieve. Here are some of the key details to pin down:

• Plans & Specifications: Detailed architectural drawings, framing, and interior finishes you plan to use.
• Project Budget: The overall cost of the property, land, labor, materials, permits, and contingency reserves.
• Build Schedule: A timeline outlining when the foundation is laid and when various construction milestones are completed.

Unlike traditional mortgages, funds for a construction loan are typically paid out in stages as construction progresses.

• Draw Schedules: Funds are distributed in draws as key milestones are met.
• Project Inspections: Lenders will often require inspections before releasing funds for the next phase.
• Interest Payments: Borrowers often make interest-only payments on the funds drawn during the construction phase.

To learn more about how construction loan draws work, read our complete guide.

You don’t have to build from the ground up to create a home that fits your vision. Renovation financing can help fund improvements to an existing property, whether you’re purchasing a fixer-upper or updating your current home. Explore options like FHA home loans, which include the FHA 203(k) renovation program, VA home loans for eligible veterans, and home improvement loans to learn more about financing your project.

When financing a new home, you may choose between a one-time close and a two-time close construction loan. A one-time close combines construction financing and the permanent mortgage into a single closing, while a two-time close uses separate closings for construction and long-term financing. The right option depends on your financial goals, project timeline, and loan eligibility. Our team can help you compare the two approaches and understand which may fit your plans.

Construction-to-permanent loans combine financing for building your home with the mortgage used after construction is complete. Depending on the program, this approach may offer the convenience of a single closing, a smoother transition to permanent financing, and interest-only payments during construction. Loan terms and payment structures vary, so understanding your options upfront can help you choose the right fit. Explore our loan programs or connect with the Mortgage Mark team to discuss your project.

Whether you’re building a brand new custom home or tackling a major home improvement project, we can help walk you through the options and help you find the right financing for your needs.

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