Down payment construction loan

[carrieg07]

My fiance and I are still in the beginning stages of our building process. We have the full 20% saved away for the amount we want to borrow to complete the construction of our home. We already own the land as well.

I'm wondering if someone could explain the downpayment process to me? Do we write the check out to the bank at the end of the process? The bank told us we can do it up front or wait. Then they were saying we could use our money however we wanted during the construction process interest free because they were only going to loan out 80%.

We've been told that it may be a good idea to use our house/land combination to cover the entire down payment. Then, once the construction loan turns over into the regular mortgage when we complete the building, to put our large sum of money towards straight principal. This would drop our payments each month.
Is this correct, and is this a good idea?

I'm trying so hard to understand every aspect of the process and make the best financial decision for us.

THank you for your help.

[Sawzall Paul]

It is hard to say because believe or not many different places have different ways of paying for loans and dealing with everything that comes along with them. I don't want to provide false information so you may want to sit down and meet with those you are getting the loan from to fully understand all of their requirements and make sure that you fully understand everything they are saying.