The definitions outline various loan types designed for homeowners, builders, and renovators, covering construction and improvement-focused options.
Draw Mortgage
A draw mortgage, also known as a "construction mortgage," allows you to receive funds in stages as your new home is being built. You get money at different points of the construction process—like when the foundation is poured, the walls are framed, and the house is completed. This type of loan is popular with builders or homeowners managing the construction themselves.
Land and Construction
A land and construction mortgage helps you finance both the purchase of land and the construction of a home on that land. For instance, if you're buying an empty lot and plan to build a house, this loan covers the cost of both the land and the building project.
Purchase Plus Improvements
A purchase plus improvements mortgage allows you to buy a home and finance the cost of renovations right from the start. For example, if you buy a house that needs $40,000 in upgrades, this mortgage lets you add that amount to your loan, so you can renovate the property after buying it.
Refinance Plus Improvements
With a refinance plus improvements mortgage, homeowners can refinance their mortgage and borrow extra to cover renovation costs. For example, if you want to renovate your kitchen or add a bathroom, you can increase your mortgage based on the home's future value after the renovations.
Renovation
A renovation loan allows you to borrow against the equity in your home to pay for home improvement projects. For example, if you want to add a deck or finish your basement, you can use your home’s current value to finance the renovations.
By making these loans available in Lender Spotlight, you empower brokers with the tools they need to match their clients to tailored solutions, whether they're building, renovating, or purchasing a property with added improvements.