Here's how it works:
1. The first mortgage is known as a "construction loan" which is a short term mortgage used to build a property. You borrow to build the property, then you must pay this specialist construction lender back right away.
2. The takeout mortgage is the long-term follow-up mortgage, which is used to pay off the construction loan lender, and then to serve as the long-term mortgage going forward.
Hope that helps!
our corp office is in texas I can refer you if you need more loan advice:)
Monir is correct, but you can also just do an all in one loan as well. If you are building in the area, feel free to get in touch with me & I would be happy to help. I am a broker & a loan originator as well.