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
Some states make the legal assumption, based on title theory, that the mortgagee is a partial owner of the real estate securing the mortgage and remains as is until the debt is fully paid. ...
To default on a loan means to intentionally or unintentionally miss several consecutive monthly payments over the course of a few weeks or months. Most borrowers learn the definition of ...
(1) Occupancy rate at which rental income of a property pays for operating expenses and debt service, leaving no residual cash flow. (2) The level of sales of a real estate business where ...
One of series of parallel beams directly supporting a floor or a roof. Joists can be made out of wood, steel or steel reinforced concrete. Joists are in turn supported by other beams or ...
Physical record card where the date of the last assessment valuation and its results, as well as a property description are kept. ...
Type of investment company that invests money in mortgages and various types of investment in real estate, in order to earn profits for shareholders. Shareholders receive income from the ...
Wall having an air space between the two sides. A hollow wall is often covered with wallboard that is nailed to the wall studs providing an air space between the two sides. ...
Mortgage for an extended time period (e.g., 25 years) Type of real estate investment trust (REIT) that gives long-term mortgages to real estate developers and contractors on new or ...
Individual who by his expertise, education, and experience prepares syndication reports. ...
Have a question or comment?
We're here to help.