Construction Loans
Definition of "Construction loans"
Also called interim financing. A mortgage that provides the funds necessary for the building or construction of a real estate project. The project can be a residential subdivision, a shopping center, an industrial park, or any other type of property requiring financing during the time required to complete construction. Normally, the full amount to be loaned is committed by the lender, but the actual disbursement is dependent upon the progress of the construction. Funds are sometimes distributed to the borrower in a series of draws, depending upon the work required by the lender. Another method used is for the developer to submit all bills to the lender, who in turn pays the bills. In either case, interest is paid on what has been distributed and not on the total amount to be borrowed.
Popular Real Estate Terms
Burdens one parcel of land (the servient estate) for the benefit of another parcel (the dominant estate). ...
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To sign a note on behalf of another individual and, therefore, to guarantee payment. The cosigner is responsible for the loan if the borrower defaults. Such an agreement may occur in ...
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The result of an act or a fact. ...
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Day the attachment of property under a judicial order becomes effective. ...
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