If you’re planning to buy a new house still under construction, or perhaps even having your home custom built, a construction loan may be right for you. Construction loans depend upon a concrete plan and building schedule and are due when construction is complete; until then you typically pay only interest.

A construction loan is designed to work with the building process, so that you can allow for unpredicted delays and variables. If you already own the land on which you’re building, you can save yourself additional money.

Construction loans are shorter-term loans, but you may be able to convert your loan to a traditional mortgage and pay it as you would any other. This is called construction-to-permanent financing.

You begin with a construction loan, and when your certificate of occupancy arrives, it is converted to a mortgage—all with only one application, one approval process and one closing. It may be the simplest, most convenient way to finance the home of your family’s dreams.