How to Submit a Draw Request with LYNK Mortgage
How to Submit a Draw Request with LYNK Mortgage
Once your fix and flip loan or new construction loan closes, the construction budget is paid out through draws as the work gets done. This guide covers the practical side: what to prepare, how to submit a draw request with LYNK Mortgage, and how to get paid without delays. For background on how draws work in general, including inspections, title updates and closeout, see our step-by-step guide to the construction loan draw process.
Start With Your Draw Schedule
Every draw request is measured against your draw schedule. During underwriting, you or your contractor submit a scope of work or draw schedule that identifies the cost of each task. If you finance construction or renovation costs, that budget is held back at closing and released through draws. On a $200,000 loan with a $75,000 construction budget, for example, $125,000 is disbursed at closing, with the balance available for future construction draws.
Most loans are structured with two to four draw requests. Complex projects may have up to six, which is generally the maximum. Because draws are released by phase, such as foundation, framing, rough-in and finishes, after each completed phase is verified, it pays to build your schedule around phases your contractor will actually finish.
What to Prepare Before You Request a Draw
- Completed work: Draws may be submitted only for completed work. Kitchen cabinets sitting in the garage aren’t completed work; once they’re installed, that progress can go on a draw request.
- Cash for deposits: You can’t draw to pay upfront contractor deposits or materials deposits. As the property owner, you pay any deposits before the work is complete, so plan for them.
- An honest percent complete for each item: Walk the property with your contractor and estimate how much of each item on your draw schedule is done. The inspection will check those numbers.
- Access to the property: Decide how the inspector will get in, such as a lockbox or an on-site contact, before you submit.
- Your own records: Keep your budget tracker, contractor invoices and lien waivers organized so you always know what’s been paid and what’s left. Our process guide explains how to track draws against your budget.
How to Submit a Draw Request, Step by Step
- Finish the work: Make sure the items you’re requesting are complete, or know their actual percentage of completion.
- Go to the online portal: Draw requests are submitted in the LYNK Mortgage online portal.
- Enter your progress: Fill in the percentage of completion for each item on your draw schedule.
- Inspection: LYNK Mortgage schedules an inspection of the property to verify that the requested work is complete.
- Funding: Once the work is verified, the draw is released. Provided there are no issues, most draws are paid within 2–5 business days.
Repeat these steps for each draw until the project is complete.
What Speeds Up a Draw
Timing depends on factors such as access to the property and the accuracy of the draw request, so those are the two things to get right.
- Accurate percentages: A request that matches what the inspector sees on site moves fastest.
- Easy access: Have access arranged before you submit so the inspection isn’t held up.
- Requests timed to completed phases: Submitting when a phase is finished keeps each inspection simple and avoids a reduced draw.
- Early conversations about changes: If your scope or budget changes, talk to your dedicated loan officer before the work is done rather than after.
Why a Draw Gets Delayed or Reduced
- The work isn’t finished: If the inspection shows less complete than you requested, the amount released reflects the work verified. The rest stays in your construction budget for a later draw once the work is done.
- Percentages are overstated: Rounding up on percent complete leads to a smaller draw than you expected, and the balance has to wait for a later draw.
- Deposits or uninstalled materials: Deposits and materials that haven’t been installed can’t be drawn.
- No access: If the inspector can’t get into the property, the inspection and the draw have to wait.
- Costs outside the rehab budget: The rehab budget covers the work itself. Carrying costs such as interest, taxes and insurance, and selling costs such as marketing, aren’t part of it, so plan to pay them separately.
- Unplanned scope changes: Work that isn’t on your draw schedule has no line item to draw against. Raise changes with your loan officer first.
What Happens to Leftover Funds
If construction funds remain after the project is fully completed, LYNK Mortgage disburses them to you, provided the loan is not in default. Interest on fix and flip loans is paid monthly, and there is no prepayment penalty, so you can pay off the loan as soon as the property sells.
Getting Started
New to draws? Start with the definitions of a draw request, a draw schedule and a final inspection, or read how draw schedules work on a fix and flip.
LYNK Mortgage is a direct private lender making business-purpose loans to LLCs and corporations on non-owner-occupied investment property, and first-time flippers are welcome with more equity in the deal. You can get an instant term sheet online with only a soft credit pull and no application fees, and fix and flip, bridge and construction loans typically close in 7–15 days.