Building a home on your own land is an exciting and rewarding endeavor, but it can also be an expensive one. It’s essential to carefully consider your goals and finances before you make the decision to buy land and build a home.

Financiamento para construção em terreno Proprio on your own land is available through a variety of options including a construction loan, land contract and other alternatives like a land purchase/land lease. In this article, we will focus on financing a new build through the use of a construction loan when you own the land outright.

Financing Options for Building on Your Own Land

A construction loan is a short-term loan that’s not quite like a traditional mortgage. Instead of a lump sum upfront, your lender will disburse funds to your builder in a series of payments, known as draws. These are tied to certain milestones in the project and are designed to keep your construction on schedule. Additionally, your lender may require a disbursement schedule and regular inspections to ensure the project is progressing as expected.

Once your construction is complete and you’ve received a certificate of occupancy, your construction loan will usually convert into a permanent mortgage. This process, known as construction-to-permanent financing, can be done in a number of ways depending on your lender and the type of loan you’re applying for. Some lenders will separate these two loans with different approval processes and closing dates, while others will combine them into a single transaction with only one closing date and set of fees.