Building your dream home requires substantial amount of money. You can wait to have enough savings or get a home construction loan that will fit your needs. A construction loan is preferred by borrowers since you can draw money as you need it and not a lump sum, which means saving on interest. A home construction loan allows you to get funds from your lender for each building stage of your home.
A typical home construction has five stages: first is the purchase of the land, second is the pad or the floor, then the roof, the lock up, and finally, the finishing. During construction, a home construction loan usually runs on a full standard variable rate or SVR. After the construction is complete, you can then choose what type of interest rate you want for your home construction loan.