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Construction-Only Loan
A Construction-Only Loan is a short-term financing option that covers only the cost of building a new home. Once construction is complete, the loan must be paid off, typically by securing a permanent mortgage. This type of loan is ideal for homebuyers or builders who need temporary financing for construction but plan to arrange long-term financing separately. With flexible terms and faster approvals than traditional mortgages, a construction-only loan is a great choice for those looking to custom-build a home with short-term funding.
A Reliable Home Loan You Can Trust.
Tailored for Custom Homes
Perfect for borrowers building from the ground up or planning significant renovations.
Interest-Only During Construction
Keep payments low while the project is underway.
Flexibility in Long-Term Financing
Choose your permanent mortgage after the construction phase is complete.
Ideal for Staged Projects
Provides financial control for phased or multi-stage construction plans.
Loan Guidelines
If your details are near these guidelines, we encourage you to apply or reach out. Even if you don’t qualify for a 30-year fixed-rate mortgage, we may have other options available.
The Home
Purchase a new home or refinance your current mortgage.
Credit Profile
A credit score above 620 is typically required.
Debt-to-Income
Your debt-to-income ratio (DTI) should be under 50%.
Closing Costs
Along with your down payment, you’ll need sufficient funds to cover closing costs.
Explore Your Potential
Our calculators help you understand and visualize your options
Mortgage Calculator
Planning to buy a home? Calculate your estimated monthly payments, including taxes and insurance.
Refinance Calculator
Considering refinancing your mortgage? Find out how much you could save.
Frequently Asked Questions
Have questions? We’ve got answers! Explore our FAQ section to find helpful information about loans, refinancing, and more. If you don’t see what you’re looking for, feel free to contact us—we’re here to help!
Who are Construction-Only Loans best for?
Construction-Only Loans are best for individuals planning to build a custom home or undertake significant renovations and who prefer to handle the construction financing separately from permanent mortgage financing.
How do Construction-Only Loans work?
A Construction-Only Loan provides funding exclusively for the construction phase of your project. Borrowers typically make interest-only payments during construction, and the loan must be paid off or refinanced into a permanent mortgage once the construction is complete.
What are the pros and cons of a Construction-Only Loan?
Pros:
- Flexibility to choose permanent financing later.
- Only pay interest during the construction phase.
- Ideal for customized projects or phased construction.
Cons:
- Requires refinancing or full repayment after construction.
- Potentially higher closing costs due to separate loans.
- Interest rates may be higher than traditional loans.
Can I use a Construction-Only Loan for any type of property?
These loans are typically limited to primary residences or vacation homes. Investment properties may require different financing options.