are story loans. That is the lender has to know the story behind
the planned construction before they're willing to loan you
money. Some common features to a construction loan.
Construction loans typically require interest-only payments
during construction and become due upon completion. Completion
for homeowners means that the house has its certificate of
are usually variable-rate loans .The contractor and the lender
establish a draw schedule based on stages of construction, and
interest is charged on the amount of money disbursed to date.
in construction loans is how much of the project cost the lender
is willing to lend. The land that you owe can be considered as
equity on the construction loan.
Construction-to-permanent financing programs are also better for
some homeowners where the construction loan is converted to a
mortgage loan after the certificate of occupancy is issued.
After this you only have to have one application and one
construction loan, unlike a mortgage, isn't meant to be for a
You can take out a mortgage to pay off the construction loan.
Construction loans aren't meant to be a method of long-term
financing. A first mortgage is a better choice to convert your
construction loan than a home equity loan.