Draw Mortgage
Benefits of a Draw Mortgage
Flexible Access to Funds
With a draw mortgage, you have the flexibility to access the funds you need at different stages of the construction process.
Interest Rate Certainty
This means the builder can pay contractors and suppliers as the build progresses, rather than having to pay for everything upfront or at completion.
Draw Mortgages
A draw mortgage, also known as a process draw mortgage, allows you to borrow the full mortgage amount in stages as the construction of your new home progresses. Each time you complete a stage, you can draw down the funds needed for that stage.
Typically, the lender will send an inspector to verify that the work has been completed before releasing the funds. With a draw mortgage, you start paying interest on the loan as soon as the builder draws on it, versus paying interest on the full amount right away, like with a traditional mortgage.
Mortgage Services
Is a Draw Mortgage a Good Idea?
Overall, a draw mortgage can be a good option for those who are looking to build a custom home. Sometimes this is a requirement of the builder, so to obtain the home you want, it’s the only path available.
