What Is a Progress Drawdown?
Construction loans have a different set of parameters than conventional mortgages and several variations. Plus, owner-builders and investors do not receive a lump sum. Instead, they receive progress drawdown payments. When individuals apply for construction loans, they fill out an application and provide financial documentation. Plus, they must provide their building plans.
Lenders use the plans to establish project milestones. In most cases, construction projects take place in five stages. When the crew completes each stage, the borrower requests the payment from the lender. It takes five to 10 days to process and send the payments.
Mortgage House is a non-bank lender that issues construction loans. However, we also balance the risk involved with the projects. Since the land is vacant, we release the funds in increments. The drawdowns help the borrower manage their interest rate payments. Plus, you might not need the entire amount. Therefore, you only repay the amount that you requested for payment for materials, labour, and permits.
To further understand how a construction loan works, contact our loan specialists. They will evaluate your application and project. The proprietary tools help them find loan terms that work based on the applicant’s financial circumstances. We also take the market into account.
Plus, we offer several online tools that help clients obtain other loan products. Try our Mortgage House car loan calculator for free.
Progress Drawdown and Construction Loans Conclusion
Construction loans have progress drawdown payments. They ensure that the project continues moving along. Mortgage House finances construction projects. Contact our loan specialists to discuss your options.