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Authentic Storybook Homes in Maryland
Construction Loan Process

"What is any real estate transaction if not the down payment on a fairytale ending?"
We recommend that our Buyers use a local mortgage company for their construction loan.  Though it is the Buyer's choice, using a local bank will make it more convenient for your loan and construction process to run smoothly.  Don't let your loan application get lost with a national bank!  Howard Bank Mortgage, our neighborhood bank, is here to service your mortgage needs!  With branches located all over Maryland, they are here to give you personal and exceptional service.  Their professionalism and dedication to you as a customer will guide you through the financing of your new home.  Below is an explanation about the construction/permanent loan process by Ruth Swartz of Howard Bank Mortgage.  She may be reached at 443-871-0565 or at email rswartz@howardbank.com should you have any questions.

Are  you looking for two loans in one? A construction loan that turns into a permanent loan automatically after construction is complete?  Howard Bank Mortgage has the solution for you!   It is called a Construction / Permanent Loan.


Highlights of the Construction / Permanent Loan

*   One Rate / One Closing

       12 Month term to build and during that time, you only pay interest on the amount draw

*   Permanent rate locked before construction begins

 Maximum Loan Amounts and LTVs

  Loan Amount                                        LTV

 0               to     $750,000                     85.00%
 $750,001    to  $1,000,000                     80.00%
1,000,001  +                                         75.00%

Construction Loan Draw Schedule And Formula

 The common formula used to calculate a construction loan draw schedule:


Before the draw schedule even begins, the lot is purchased and paid off if the buyer is combining the house and lot for their construction loan.

1. First Draw (Slab/Foundation) 15%.   Any builder "soft costs" such as permits are added to this advance. Septic and any site work is also included. The loan fees, attorneys fees, title insurance, etc. are paid at closing.

2. Second Draw (Framing/Rough Carpentry) 10% This draw is released when foundation is poured. First floor walls and sub flooring in place with exterior walls sheathed.

 3. Third Draw (Roof/Mechanicals) 20% The draw will include second floor sub flooring and walls, roof framing, rough plumbing electrical and HVAC inspected, and any miscellaneous items like garages and pools.

4. Fourth Draw (Exterior/Interior Finishes) 20%. The draw includes doors and windows installed, drywall installed, exterior siding or painting complete


5. Fifth Draw (Trim-out) 20%. Draw includes all interior trim, cabinets, paint and final plumbing HVAC and electrical


6. Final Draw  (Project Closeout) 15% Draw includes all decks and patios, house cleaned. appliances , and any landscaping. The final inspection and occupancy permits are issued.


This schedule may be modified as determined by local requirements.

Your contractor may complete construction on a different schedule. Funds can be disbursed for each item upon completion.

Howard Bank Mortgage is flexible with draw schedules and will work with your builder so that the construction of your new home runs smoothly in a timely manner.


For More Information Contact

Ruth Swartz
Mortgage Loan Officer, NMLS# 205797

Cell: 443-871-0565
Office: 410-266-9014 
Fax: 410-266-9730

Email: rswartz@howardbank.com

Welcome!Storybook Home PlansProductsConstruction CostsConstruction Loan ProcessMeet Storybook Classic Homes Realtors & Land Owners Wanted!PhotosContact Us