The minimum 5% down payment is required to come from your own personal funds and cannot be in the form of a gift. In some cases, the cost of PMI insurance can be either reduced or eliminated depending on your loan structure. Down payments of less than 20% will typically require Private Mortgage Insurance (PMI). We will typically finance up to 95% of the cost to build your home (land and construction cost). How much of a down payment am I required to have? Your construction loan and end loan are two separate loans, which means you have two separate costs and generally the interest rate for your end mortgage isВ NOT guaranteedВ until completion of your home. Your end loan (permanent long term mortgage) is taken out upon completion of your home. It is a short term mortgage that provides financing for just the construction period. You have peace of mind knowing exactly what your interest rate and monthly payment will be.ДЄ construction-only mortgage is just that. Best of all, with this type of construction loan, your interest rate is guaranteed up-front, which means that you donвЂ™t have to lose sleep over what happens to interest rates while your home is being built. The first option is a construction-permanent mortgage and the second option is a construction-only mortgage.ДЄ construction-permanent mortgage is both your construction loan and long term mortgage combined into one loan, which means you only have one closing for both your construction loan and your long term mortgage. Traditionally, construction loans are done two different ways. If there is something I missed, let me know so I can add it to this page for others. I have been lending since 1991 so make sure to scroll down as there are a number of questions and there is a good chance I have answered many questions you may have. Below is an expanded list of common questions I have compiled over my career as a lender. In this video I talk about some general common question in regards to construction loans.

Bank construction loan draw schedule