Financing a custom build is different than buying an existing home. You typically need a **Construction-to-Permanent Loan** (often called a One-Time Close loan).
How it Works
1. Closing: You close on the loan once before construction starts. This saves you duplicate closing costs and locks in your rate.
2. Draws: During construction, D & W Builders submits “draw requests” to the bank as milestones are reached (e.g., foundation poured, framing done). The bank inspects the site and releases funds to pay subcontractors.
3. Interest Only: You typically only pay interest on the money that has been paid out, not the full loan amount, which keeps payments manageable during the build.
4. Conversion: Once the home gets the Certificate of Occupancy, the loan converts to a standard 15 or 30-year mortgage automatically.