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construction loan

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Construction loan
A short-term loan to finance building costs.

Construction Loan
A short-term loan used to finance the building of some real estate project. The builders take out a construction loan in order to begin the project while they obtain long-term funding. Because there is no guarantee that the builders will be able to obtain long-term funding and a construction loan is not intended to fund an entire project, construction loans are fairly risky, and, as a result, have high interest rates.

construction loan
A short-term mortgage taken to finance the construction of a real estate project before permanent long-term financing is obtained. Because of its relatively high return, some real estate investment trusts specialize in this type of loan. Construction loans are often more risky than long-term mortgages.

construction loan
A loan originated for the purposes of providing payment for construction work or subdivision development.See also building loan agreement.


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Financing was based on a 12-month construction loan followed by a 6-year term with a 30-year amortization schedule and was arranged for the borrower, Sound Middleton, LLC, by NorthMarq through its relationship with a regional bank.
TT Lender Solutions has achieved unprecedented growth as a third-party construction loan administrator and default-management service provider.
Depending on your situation, you likely will have a construction loan during the construction period before the actual mortgage loan is closed at completion.
 
 
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