- These funds for construction are drawn periodically based on the progress of the project.
- Each month you will only pay interest on the balance of the loan that has been drawn up to that point in time.
- Upon completion of the construction project, the loan automatically becomes permanent without re-qualifying.
- The same interest rate applies as during the initial period.
- The loan amount can be based on the payoff of any current liens plus the cost of the project and closing costs.
- The value of the loan can also be based on the value of your home after the project’s completion.
- You may also be able to borrow enough funds to complete the project even if your home does not have much equity.