01 Apr 2022

How Long Do Banks Take to Pay Progress Payments?

When Do Lenders Pay Progress Payments

Construction loans work differently from mortgages. First, construction loans require additional documentation from the applicant. Second, the applicant receives progress payments instead of one lump sum. In some cases, the applicant does not see any payments. Instead, their building crew receives them.

Lenders go through several checks and balances for a construction loan. When owner-builders and investors apply, they submit proof of land ownership and their plans. Lenders use this information to determine the amount that they can lend to the applicant. It also helps them set up a timeline for the progress payments. 

It makes sense that borrowers and crews want to know when lenders pay progress payments. After the owner-builder or the crew submits the paperwork to request payment, the lender ensures that the team met the milestone requirements. It takes them about 10 business days to verify, process the paperwork, and make the funds available to the appropriate party. 

After the lender disburses the first progress payment, the next ones can take as little as five business days. 

Mortgage House follows this process when disbursing progress payments. The goal is to establish trust and credibility to help the process move seamlessly. 

In addition, Mortgage House provides several online tools to help owner-builders, investors, and homebuyers prepare for construction projects and home purchases. Check out our mortgage calculator for free. 

When Do Lenders Pay Progress Payments Conclusion

Owner-builders and investors can expect lenders to pay progress payments 10 business days after submitting a request. Mortgage House follows a similar process to banks. For more information, contact our loan specialists today.

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