How Construction Loans Work

There are two components to a construction loan – the time during construction (also known as the draw period) and the time after construction (the permanent mortgage loan period).

As work is completed, and when you agree a contractor should be paid, we'll release the funds to the title company to pay your contractor.
You’ll enjoy interest-only payments on your loan for the first 12 months of construction.

At Summit, your construction loan automatically transitions into a permanent Adjustable-Rate Mortgage (ARM) loan, and your payments reflect the interest rate at the time of your original loan application. With just one closing for your construction-to-permanent mortgage loan, you only pay closing costs once – saving you both time and money!

Special Documentation and Approvals

To make sure that you qualify for a construction loan, in addition to the paperwork and documents required for a typical mortgage, Summit will need to review the following from your builder:

Project plans and specifications
Construction contract
Construction cost breakdown

For any other questions about construction loans, talk with a .

No worries about missing out on a lower ARM rate after you’ve locked in – you could have the flexibility to switch to that lower rate (and lower payments) for just $300! Here’s how this unique Summit rate modification may come into play:

Before Closing
For example, if you lock in your ARM rate way ahead of your closing and then rates go down right before you close on your home.

After Closing
A great option if rates go down in the future and you want to switch to one you love more – anytime up to one year before your first rate adjustment on your Summit ARM. For example: You could modify your rate within the first 9 years of your 10/1 ARM, or within the first 6 years of your 7/1 ARM.