A new construction loan is a short-term financing solution used to fund the building of a new home. Instead of receiving all funds at once, money is typically released in stages as construction progresses. Once the home is complete, the loan is typically refinanced or transitioned into permanent financing, depending on the loan structure.
You begin by reviewing your home plans, budget, builder, and timeline with your loan officer. Early planning helps set expectations and gives you a strong starting point before construction begins.
Once your financing is approved, you’ll have a construction loan closing, so you can move forward with building your home and have financing in place.
Funds are typically released in stages as work is completed. During construction, payments are often based on the amount drawn for completed work rather than the full loan amount.
When construction is complete, your loan typically transitions into permanent financing so you can move into your new home with a long-term mortgage solution that supports your financial goals.
A new construction loan may be a good fit if you:
Building a home is different from buying an existing one. Your BankSouth Mortgage loan officer will work with you throughout the process to help keep financing aligned with your project.
You should know what to expect at each stage, from application through completion. We focus on making the process easier to understand so you can make informed decisions along the way.
We understand that individual home builds and financial objectives are unique. Your financing approach should reflect your builder, timeline, and long-term goals. At BankSouth Mortgage, we take pride in ensuring our clients and business partners experience mortgage excellence through personalized support.
We coordinate closely with builders throughout the construction process to help support a smoother experience from start to finish. Learn more about how we work with builders.
How is a new construction loan different from a traditional mortgage?
A new construction loan is used to finance a home while it is being built. A traditional mortgage is typically used to purchase a home that is already complete.
Do I make payments during construction?
In many cases, yes. Payments during construction are typically based on the amount of funds that have been drawn.
What happens when construction is complete?
Once the home is finished, the loan typically transitions into permanent financing or is refinanced into a long-term mortgage, depending on the loan structure and your financial goals.
Can I choose my own builder?
Yes, as long as the builder meets approval requirements, ensuring the project aligns with lender guidelines and construction standards.
