Construction Loan's FAQImportant information about your loan and the disbursement process is explained in these frequently asked questions. It is very important that you understand the loan process before your loan closes. If you still have questions, please feel free to contact us at 360-647-6000 or 888-663-7650.
When does my construction loan term begin?
Your construction term begins on the date that you sign your closing loan documents. It is important to know that your Construction-to-Permanent Loan funds are disbursed as your home is built.
How do I get my money?
At closing, you will sign a Construction Advance Delivery Information form that identifies the method by which you wish to receive your monthly draws. For faster access to your construction funds, we suggest that you open an account at Bank of the Pacific. We will help you set up your account and deposit your disbursement funds directly to it. For more information, please contact your Loan Representative.
Can I get reimbursed for pre-paid items?
Pre-paid items that are reflected in your budget and used as your equity contribution are not reimbursable.
What are deposits?
Sometimes vendors for items like cabinets, light fixtures, windows, appliances or any other specialty improvement that requires custom craftsmanship usually require deposits. Bank of the Pacific will release UP TO 50% of the total amount budgeted in the specific line item for the following deposits upon receipt of vendor invoices:
- Special Order Appliances
- Custom Lighting
- Rough Framing Materials
The checks will be made payable directly to the vendors for the deposits.
How do I request a draw?
Draw requests can be made once per month by contacting your Real Estate Loan Representative directly or by faxing your signed draw request to (360) 738-8168. No verbal Draw Requests are permitted.
How does the disbursement process work?
Disbursements on a construction loan are designed to reimburse the borrower as construction of the home progresses. When you request a draw by filling out one of our Draw Request forms, we will send one of our inspectors out to your project to determine the amount of work completed. Bank of the Pacific will disburse construction proceeds based only on the amount of work that has been completed at the time of the inspection.
How long will it take for me to get the funds after I make my draw request?
Your disbursement will be released within 48 hours of Bank of the Pacific receiving the inspection report performed by our inspector and an update from the title company indicating the property is free and clear of any liens.
How many inspections are allowed and what is the cost?
The Bank of the Pacific allows you to request one draw per month. The Inspection Fee that was paid when your loan closed covers your inspection costs. Additional inspections after your allotted 6, 9 or 12 prepaid inspections (depending on what was collected at closing) cost $150.00 each.
Who does the inspections?
Inspections are completed by a qualified professional third party, contracted on behalf of Bank of the Pacific or an employee of Bank of the Pacific.
What if I need an extension of my construction loan term?
Loans that go beyond the required completion date are technically in default pursuant to your Construction Loan Agreement. If the loan has gone beyond this required completion date, all loan draws are on hold until an extension is granted. Please contact your Loan Representative (360) 647-6000 to request an extension.
Is there a fee if I need an extension?
YES, there is a fee associated with an extension of your required completion date. The fee is .25% of the loan amount for EACH month that you extend. Please keep in mind that this fee only covers the extension of your construction term. Any potential fees pertaining to the extension of your interest rate lock will be collected separately according to your Interest Rate Lock Agreement.
How do I make my final draw request?
You can make a Final Draw Request when the home is finished. The final 5% of your construction funds will be held until Bank of the Pacific receives all Final Conditions.
In addition, your loan must be in good standing according to the terms of your Construction Loan Agreement. Once your final Draw Request has been disbursed, your construction loan will be rolled into a permanent loan and sold to the investor with whom your rate was originally locked.
If you are an owner/builder or if your home was built using a general contractor:
In addition to the Certificate of Occupancy for final inspection from Government Agency (if requested), Bank of the Pacific must receive the following:
- Final Draw Request
- Any outstanding Interest owing
- Final 442 inspection with photos from the appraiser (Bank of the Pacific to obtain)
- Verification from the title company evidencing no liens on the property (Bank of the Pacific to obtain)
- Original signed and notarized Loan Modification Agreement