Construction/Permanent Loans


Construction loans are made available to finance the building or remodeling of homes. These loans may be used to purchase a lot and build or refinance/ remodel an existing home.  Construction loans require careful planning and allow the homeowner to personally finance the home construction.

The amount of the construction loan is determined by the cost of project and may be limited by the final value of the property after completion.  Your lender will review and approve the building plans and manage the payments to the general contractor.  Construction lending requires the efficient coordination of the appraiser, title company and contractor.

Most construction loans automatically convert to long-term (permanent) financing at the end of the construction period.  By eliminating the need to formally refinance, this one-time closing feature saves $1,000’s in closing costs.  Once the construction loan is closed, a credit line is established.  The balance of this line will increase as the builder receives funds at the end of each construction segment (draw).  The homeowner is responsible for the payment of interest on this line each month, based on the outstanding balance at that time. After the completion of the construction, the credit line is modified to a permanent loan.

Presidential Bank Mortgage has long been recognized as a leader in the construction lending industry. Call your local loan officer to find out how we can help you build the home of your dreams!