How jumbo two-time-close construction works
The first loan finances the construction period through approved draws. Once the home is complete, a separate jumbo permanent mortgage is established through a second closing.
Why jumbo construction needs deeper analysis
Higher loan amounts can mean more detailed review of assets, reserves, income stability, business ownership, completed appraised value and the borrower's ability to carry the project through completion.
What matters before closing
- Lot ownership or acquisition details.
- Builder, plans and construction contract.
- Construction budget and contingency planning.
- Expected completed appraised value.
- Income, assets, liquidity and reserves.
- How the permanent jumbo mortgage is expected to be structured after completion.
What changes during construction
Because construction can take many months, income, assets, credit and market conditions may need to be reviewed again before the permanent jumbo loan closes. That is one reason the permanent financing strategy should be discussed before construction begins.