Construction Loans

Construction Loans

Custom Homes, Custom Loans

Creating a brand-new home offers a wonderful chance to establish equity and finally realize your dream home. The realm of construction loans offers a diverse range of choices, each carrying its own advantages and disadvantages. It's essential to grasp the intricacies of these available options to ensure a successful and joyful journey.



At Luminate Home Loans, we're dedicated to assisting you in assessing your loan alternatives and discovering the ideal path that perfectly aligns with your unique requirements.

What is a Construction Loan?

A construction loan is a specialized financial product designed to fund the construction of a new home. Unlike traditional mortgages, where you receive a lump sum to purchase an existing property, construction loans provide funding in stages, allowing you to pay for the construction of your new home as it progresses.


Construction loan rates are typically higher than standard fixed rates due to the added risk. These loans fund homes in progress, not yet completed, making them riskier than traditional mortgages. We highly recommend seeking expert guidance on construction loans - Steve Placker is your Texas mortgage specialist ready to help.

How a Construction Loan Works

  1. Application and Approval: To get started, you apply for a construction loan. During this phase, you'll need to provide construction plans, a budget, and other required documents. We'll evaluate your creditworthiness and the project's feasibility.
  2. Loan Disbursement: Once approved, we disburse funds in stages, often referred to as "draws." These stages correspond to different phases of construction. For example, the first draw might cover the land purchase or foundation work, and subsequent draws fund the framing, roofing, and so on.
  3. Interest-Only Payments: During the construction phase, you typically make interest-only payments. This means you're only paying interest on the amount of the loan that has been disbursed. It helps keep your initial costs manageable.
  4. Conversion to a Permanent Mortgage: Once the construction is complete, the loan can be converted into a traditional mortgage, either automatically or with a simple application. At this point, you start making regular principal and interest payments.

Understanding Construction Loan Requirements in Texas

Are you ready to turn your dream home into a reality? Construction loans offer a flexible and practical solution for those looking to build their homes from the ground up.


In Texas, you have access to a variety of construction loan options, including creative jumbo loan solutions, FHA construction loans, VA construction loans, and more. Let's dive into the world of construction loans and explore how you can make your homeownership dreams come true.

01 VA One-Time Close Construction Loans

If you're a veteran or active-duty military personnel, a VA One-Time Close Construction Loan could be the perfect fit for you. With this loan, you can combine the construction and permanent financing into a single transaction, simplifying the process and reducing the need for multiple closings.


Steve Placker, your trusted Texas mortgage expert, can guide you through the intricacies of VA construction loans to ensure a smooth experience.

02 Zero Down Construction Loans

Imagine building your dream home with zero down payment! Zero down construction loans provide an excellent opportunity for eligible borrowers to start their home construction journey without a substantial upfront cost.


Our team specializes in creative jumbo loan solutions and zero down options, making homeownership more accessible than ever.

03 FHA Construction Loans

FHA construction loans are another viable option, especially for first-time home builders. These loans are insured by the Federal Housing Administration (FHA), offering competitive rates and flexible terms.


If you have questions about FHA construction loans, Steve Placker, your go-to Texas mortgage expert, can provide you with expert guidance.

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