Construction loans allow people to finance and build their dream home. The borrower makes interest only payments during the construction phase, which typically runs up to six months in length. The amount of interest paid is based on the amount of principal that has been advanced.

Principal is advanced in the form of a draw on the construction loan. The borrower requests a draw to pay for expenses that are incurred as a part of the home construction. Draws are made in sequence to cover the construction costs.

All draws are disbursed by a title company. The title company issues checks to the sub-contractors or suppliers. In return, the title company receives a lien waiver from the sub-contractor or supplier. This process allows for the title to the property to remain free of any liens and encumbrances.

Once all of the funds have been disbursed and the home is completed, the borrower will close a permanent mortgage and the construction loan will be paid off.

The State Bank of Delano strives to make this process as simple and easy as possible. We realize how stressful a building project can be, so let our experienced lenders help you make sound decisions.

*Please contact Kevin Krueger for details 763-972-4203