The initial closing includes the payoff of the lot or existing mortgage (if applicable) and related closing costs, less your down payment. Any additional costs will be paid by you at closing. You must have an adequate down payment (equity) at the closing. Equity is defined as cash paid towards the lot, pre-paid construction expenses and cash paid at closing, if required.

Want to use the equity in your current home towards the closing of your construction loan? Ask about a bridge loan or home equity line of credit.