Your Progress Payment Schedule will typically have 5-6 stages during the. Construction Loans give you the flexibility to draw down the loan at various stages of the build (also known as Progress Payments). To speak to the Mortgage Department, call 21, select option 3, then option 2. Building a property or undertaking major renovations is a big project, so it’s important you know what to expect at each stage. When you are ready to make the vision of your new home a reality, let our experienced Mortgage Lending Team help you reach your goal. You may also visit the individual sites for additional information on their data and privacy practices and opt-out options. When construction has been completed, the construction loan can be rolled over into a permanent fixed-rate mortgage loan. Calculate the monthly payment for your home construction loan. To learn more about ad choices, or to opt out of interest-based advertising with non-affiliated third-party sites, visit YourAdChoices popup powered by the DAA or through the Network Advertising Initiative's Opt-Out Tool popup. Use our construction loan calculator to plan your construction financing. Ads served on our behalf by these companies do not contain unencrypted personal information and we limit the use of personal information by companies that serve our ads. Relationship-based ads and online behavioral advertising help us do that.īank of America participates in the Digital Advertising Alliance ('DAA') self-regulatory Principles for Online Behavioral Advertising and uses the Advertising Options Icon on our behavioral ads on non-affiliated third-party sites (excluding ads appearing on platforms that do not accept the icon). Initial mortgage balance: The outstanding loan amount at the beginning of the mortgage term, usually equal to the original loan amount.Ĭonstruction loan amortization: The process of gradually paying off the construction loan by making regular payments, which include both principal and interest, until the loan is fully repaid.We strive to provide you with information about products and services you might find interesting and useful. It’s also called a DIY home build loan or an owner builder construction loan. Last interest-only payment: The final interest-only payment made on a construction loan before transitioning to a traditional mortgage payment structure. A self build construction loan is a specialty loan that borrowers use when they plan to build a residential home and act as the general contractor during the construction process. Initial construction loan: The loan obtained to finance the construction or renovation of a property before converting it into a permanent mortgage. Monthly mortgage payment: The regular, usually monthly, installment paid by the borrower to cover the mortgage’s principal and interest.įirst interest-only payment: The initial mortgage payment in which only interest is paid, without reducing the principal balance, standard in construction loans during the project’s development phase. Mortgage term: The predetermined time the borrower will repay the mortgage, such as 15, 20, or 30 years. Mortgage rate: The interest rate applied to a mortgage loan, influencing the monthly payments and overall cost. Mortgage: A long-term loan used to finance the purchase or refinancing of a property, typically repaid in monthly installments. Length of project: The estimated duration for completing the construction or renovation project, which can influence the loan terms and interest rates. Loan interest rate: The percentage at which the borrowed money accrues interest, impacting the overall cost of the construction loan or mortgage.

Remaining balance: The amount of the construction loan or mortgage that is still unpaid, which decreases as you make payments.Ĭost of construction: The total expense associated with building or renovating a property, including materials, labor, and other project-related costs.ĭown payment: The initial payment made by the borrower when obtaining a construction loan or mortgage, usually a percentage of the total project cost. Refinance: The process of replacing an existing construction loan with a new one, often to secure more favorable terms or to convert the loan into a permanent mortgage.

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