Understanding how draws work is very important. Once you’ve been approved for a construction loan, your loan acts as a line of credit from which your builder will draw money as the project moves forward. You and your builder signed very specific documents with the bank that outline various responsibilities for both of you; you will want to read those documents and make sure you understand them. Ultimately, you are responsible to your bank for your project. Your builder has a fiduciary responsibility to your bank as well but the bulk rests on you. Your builder may request what’s called a soft draw. This is a draw that takes place at the beginning of the project and is money for things lik
Financing your project is the first step. Before you can begin to seek out a lot, if you haven’t already purchased one, and hire a General Contractor, first you have to know for how much money you can qualify. I did what’s called a “one-time-close”. What that means is that I wanted to finance my lot and my construction loan at the same time. If you already have your lot, then all you need is a construction loan. Pick a good bank. This means, pick a bank that has a very strong construction loan department. Avoid the big banks and go local or small. The chances that problems surface during the construction of your home are very high. You want a bank that has experience so they can help
I just recently completed a huge milestone and built my own home. It took several years to save money and get approved; then a few more to actually get it done. The reality of this event has not yet completely sunk in but I can tell you I do feel a strong sense of accomplishment. I am assuming you came upon my site because you are looking to build your own home and were perhaps doing online research on the topic. The temptation to share a rosy story about my home build experience is very strong but I will not do that here. My experience was a tumultuous one but I fared well and wish to share as much about what I learned as I possibly can. Through my journey I met some amazing people, goo
