Funding a renovation in stages
Illustrative example — not a real client result
Matching the loan to how the builder is paid.
The challenge
A homeowner has a builder's quote for an extension and wants to understand how the work could be funded without drawing the full amount on day one.
The approach
- Review the building contract, quote and progress payment schedule.
- Compare using existing equity with a construction loan that pays the builder in stages.
- Allow for a contingency, plus the valuations and inspections a lender may require.
Example outcome
In this example, the homeowner understands how progress payments work and what a lender may need before work starts.
Construction loans usually charge interest on the amount drawn, while lenders assess the full loan amount.