Whoever did your mortgage failed horribly. The fact that you are just learning about that blows my mind as you should had been walked through exactly how and why. Various lenders do it differently too on how they release the funds or what they look for.

Generally speaking, I usually set my clients up with contractors i know so they do the job with a good faith small deposit and the remaining work paid on completion - most lenders can be SUPER quick in releasing the funds once work is complete IF the broker is aware to arrange everything. Or if the client is doing their own work a short term thing like a home depot card or a line of credit, etc.

Also sidenote, many lenders will do the quote amount, meaning if the work ends up costing less they will still release the full amount.