How it Works

Frequently Asked Questions

We often get asked certain things about the loan process. Here are some answers that will hopefully help.

What if we need more funding than the Promissory Note is set for?

In most cases we can modify the Promissory Note and loan to the needed amount, if you qualify for that amount from your mortgage lender.

How will I know how much has been funded and how much interest I have accrued?

Use our Borrower Portal to check the latest principal and interest balances of your loan.

How do I receive funding for the loan?

The disbursement of funds generally depends on the contractor or if you are owner builder, we can work on a draw schedule. We are flexible on how the draws are disbursed if we see the work matching the amount of money being drawn.

We will do periodic physical checks on the land and home throughout the process. Draws can be broken into 5 or 6 stages:

1. Concrete
2. Framing and windows
3. Sheetrock
4. Trim, doors, and paint
5. Final draw from lighting, faucets, etc.

To request money for a draw, please send us a text message.

Checks to Subcontractors

We can pay the sub contractors directly upon their request and after we have received your approval to disburse the money.

Wire Transfers

We can wire money to your bank account. This is the preferred method for transferring funds.

Materials Suppliers

We can also pay companies directly for materials. We would need the invoice through email or a phone call from the company.

How much interest will I pay and how do I pay it?

Our interest rate is 15% per annum. We charge only on the money that has been drawn, not on the entire amount of the loan.

For example, if the first draw is $50,000, we begin charging interest on that amount. This would be $625 per month. Then, if you take another draw for $50,000 we would start charging interest on $100,000 which would be $1,250 a month. We continue this pattern until all the draws have been given as per our agreement in the Promissory Note.

You can pay interest through Zelle using the account kent@hancockinvesting.com

Are there any fees?

There is a one-time fee of $200 at closing. This covers the legal fees, closing documents, and administrative fees to wrap up your loan.

Do I need a contractor to build my house?

No, however we do recommend getting quotes from several different contractors. There are many benefits of having a contractor. They give you a set price on the cost of building and usually stay within that, unless changes are made.

Contractors give you a warranty on the house for any problems that may arise in the first 2 years, and they can build the house in a certain time frame which ultimately saves you money on interest to us.

I have some of my own money, can I use it to help build my house?

Yes, you can use your own money. We recommend using your own money at the beginning to help save money in accrued interest on our loan.