14 Apr 2022

How Does Progress Draw Mortgage Work?

Progress Draw Mortgage

Lenders finance an array of real estate projects. Among them, lenders finance construction projects. Owner-builders and investors who require funding for these projects will apply for construction loans. The loan becomes a short-term solution for a big project that carries significant risk. For example, some call construction loans a progress draw mortgage too.

Owner-builders and investors submit their plans, expected timeline, building crew information, and proof of land ownership. If they have obtained permits to build, submit them with the application too.

Once lenders process and approve the financing, they release the funds in increments or progress draw payments. Construction projects take place in five stages. Construction professionals expect a deposit for their services. Veterans in the field understand that they must complete each stage before they can invoice their clients.

At every completed stage, the builders invoice their clients. Then, the borrowers fill out the request, attach documentation, and submit it to the lender. The lender processes the paperwork and releases payment to the builder directly. 

Owner-builders and investors interested in building a new single-family home or multi-unit structure who require financing for these projects can contact Mortgage House. Our loan specialists use our proprietary tools to process applications promptly. Plus, they can find loan terms for most financial circumstances. 

Mortgage House provides several online resources with no strings attached. Try our online Mortgage House car loan calculator for free.

Progress Draw Mortgage Conclusion

A progress draw mortgage works differently than residential mortgages. To finance your construction project, contact our Mortgage House loan specialists today.

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