Construction Loans

Building Your Dream Home? A Construction Loan Can Make It Happen.

Building a new home is one of life’s most exciting adventures—and biggest investments. Whether you’re planning a custom dream home or working with a builder on a new construction home, a construction loan is a major step in turning those blueprints into reality. 
 

What is a construction loan?

Construction loans are short-term loans that cover the cost of building a home. Unlike a traditional mortgage, which provides a lump sum, a construction loan is disbursed in stages called draws, as construction progresses. This makes sure that funds are available at each phase of building, from laying the foundation to putting on the finishing touches.
 

Is a construction loan the right option for you?

If you’re planning to:

• Build a custom home
• Purchase land and build simultaneously
• Work with a builder in a new development

…then a construction loan may be the perfect financing solution.
 

How do construction loans work?

Here’s a general breakdown of the process:

1. Get your Preferred Buyer Letter: Just like a regular mortgage, you’ll begin by getting pre-qualified. This helps define your budget and gives builders confidence in your financial backing.
2. Construction Timeline and Budget: Detailed plans and a construction timeline will be required. Wings works closely with you and your builder to verify costs and schedules before approving the loan.
3. Draw Schedule: Funds are released in installments based on completed milestones. Each draw is verified by an inspection before funds are disbursed.
4. Interest-Only Payments During Construction: While your home is being built, you’ll make interest-only payments based on the amount drawn to date, keeping your initial monthly payments lower.
5. Conversion to Permanent Financing: Once construction is complete, the loan is converted into a traditional mortgage with a fixed or adjustable interest rate.

What types of construction loans are there

Wings offer two options to fit your unique situation: a one-time close construction-to-permanent loan, as well as two-time close construction loan offering flexible options that are right for you.
One-Time Close Construction Loan: Ideal for simplicity, stable payments, and avoiding multiple closings.
Two-Time Close Construction Loans: Ideal for maximum flexibility, future home sale proceeds, and longer-term mortgage planning.
 

Let's build together

Your dream home is just a blueprint away—and Wings is here to help you bring it to life. Whether you prefer the flexibility of a two-time close or the simplicity of a one-time close, our mortgage experts are here to guide you every step of the way.


Article by:
Darcy McDonald
Mortgage Sales Manager
Wings Mortgage, NMLS #209020
Phone: (952) 997-8048
Apply with Darcy
 

Insured by NCUA. NMLS #405466. Equal Housing Opportunity. Membership with a $5.00 Share Savings account required to close on a mortgage loan.