The time period for construction varies, but typically lasts six to 12 months. Dollar Bank will provide a disbursement schedule reflecting stages and percentages of each advance.

During the construction period, payments will be interest-only on the amount disbursed to the builder after each advance. These payments will be billed monthly. The interest rate will be at the initial contract rate.

After the construction phase of the loan, the construction mortgage automatically converts to a permanent mortgage. You will then begin to make regular monthly mortgage payments including principal and interest on the full amount of the mortgage.

Draw Schedule

Mortgage proceeds are set up in an escrow account at closing to fund the construction. Funds toward construction that were collected at closing will be used before mortgage funds. Dollar Bank will notify the builder when they can begin building.

Draws are paid to the builder in accordance with the loan advancement schedule. Prior to the distribution of any draw, Dollar Bank will send an inspector to the site to verify the status of construction for the bank. Payments to the builder are processed following the inspection. Your builder is paid according to the agreed upon draw schedule. Stages on the advancement schedule may be paid out of sequence, but partial draws are generally not permitted.

If the inspection proves to be complete, a check made payable to both you and the builder is provided for the amount of that draw. A Dollar Bank construction representative will oversee each draw for accuracy.

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