Construction Loans

Construction loans are short-term, interim loans used to finance the building of a structure or home. These loans are typically used by builders, developers, and contractors to fund construction projects. Construction loans are usually taken out for a period of six months to one year and must be repaid in full once the project is completed. Construction loans can also be used to purchase land for a construction project. Generally, these types of loans require collateral such as land or other real estate assets as security against default on the loan. Interest rates on construction loans tend to be higher than those on traditional mortgages due to their short-term nature and increased risk associated with them.