re: Construction loan process for new home build questions

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Your house plans will be appraised. If your property is more than 20% of your anticipated construction costs you will not have a down payment. You will get a check book to write checks to sub contractors. The draw schedule is based on percentages pre determined. You only pay interest on the amount of money you have requested in draws.

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This seems about right. Our land loan got rolled in with our new construction. We had to put down 10% of total loan and received a checkbook to pay all the contractors. I get an invoice and then submit to my banker. He deposits into the checking account for me to write checks.

All of our materials comes from Dufrene's building supply, so I use my credit card to pay for materials cost to collect 2% cash back. I then take money from the checking account to pay off the credit card once the money clears. I also pay contractors that take credit card without charging me a fee to get cash back money. I figure I'll have enough cash back money to pay for upgraded tools to outfit my new shop area.