CONSTRUCTION LOAN EXPERIENCE???

I am a commercial loan officer and do construction loans for contractors. This process may differ for you since (I assume) you would be getting a consumer construction loan.

The draws are made on a % of completion basis. Meaning, the inspector has a spreadsheet that he fills out telling the bank what percentage of the house has been built. The bank funds the draws based on that.

There is no penalty for the house not being done at maturity. (Usually 12 to 18 months). The loan officer simply renews the loan for another 6-12 months. The only penalty would be that you pay more interest.

Please do your research on the builder! Ask him for supplier references and call them to see how he pays. Make sure he doesn't have too many projects going on.

Feel free to PM me of you have additional questions.