| When I built, I was approved for a construction loan, once the bank saw the plans and the estimate the builder had given me. I told them what my down payment was. Once construction began 'my' money was used first, and then 'draws' were made from the amount that was borrowed. Typically there was to have been 3 draws from the amount I was allowed to borrow. I then put that (draw) $$ into an account, and paid for different things house related. Once the house was complete, and had passed inspection, and everyone was paid, the loan was rewritten to a mortgage. It was not written for the full amount of the construction loan approval amount, as it was not needed or necessary. Also, what happens to the extra money if we borrow 300K and we build the house for 200 or 250K? Meaning do we give it back to the mortgage company or do we put it toward our mortgage?
Did you really mean to say borrow 300K
If the house cost 300K to build and you built for $250K, and put in 100K, then you would only have the mortgage written for $150. Sue |
