How Do You Pay a Builder?
Construction loans differ from mortgages. Home loans remain straightforward. Construction loans have several moving parts. For example, applicants must pay a builder for the work that they complete. During the application process, owner-builders and investors figure out how they want to pay their builders. One option is to have the builder invoice you. Then, you submit the paperwork with documentation to the lender. Next, the lender reviews the paperwork. If everything checks out, they issue the funds to you. Then, you pass them to the builder.
Another option is to have the lender pay the builder directly after they approve the milestone request. Since lenders work with digital technology, they can wire the funds to the appropriate account. If you opt for this option, ensure that you receive notification from the lender. You want to remain in the loop on all the financials.
In general, ensure that you obtain an invoice from the builder. Keep a copy for your records. Fill out the drawdown request form and attach documents that the lender requests. Sometimes lenders must confirm the progress of the work. If necessary, a site visit can take place.
Construction projects take place in five stages. Thus, you’ll repeat the process four more times. Mortgage House loan specialists help owner-builders and investors obtain financing for this project.
Do you need to refinance a home loan instead? Mortgage House can help.
Pay a Builder and Construction Loans Conclusion
You can pay a builder directly or have your lender deposit the funds in their account. Our Mortgage House loan specialists can answer this and other questions about construction loans. Contact our team.