![]() ![]() Most lenders will allow you to borrow up to 75% of the construction cost. This ensures that the construction loan funds are used towards constructing the home. Instead, the contractor will only receive money proportionate to the completion of the house. This means that the contractor does not receive the entire loan amount upfront to build your home. ![]() For example, if you are building a staircase, you can use a stair calculator to estimate how much material you will need for that project.ĭraws are paid out in stages of the home construction process. You may talk to the contractor directly or use different calculators to estimate the amount of resources a project requires. It is important to have a clear budget to increase the chances of getting the loan. Regardless of who gets the money from the bank, they usually require a construction plan or a budget for the project. Other lenders might only deal directly with the contractor. Your lender may provide the funds to your lawyer, who in turn will disburse the funds to your contractor. Construction draws is the process of your lender providing financing to you, which you will then use to pay contractors and for supplies. Construction loans are also called draw mortgages. ![]()
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