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AgentOneAnonymous Visitor
 | Construction loans are different to other loans in that you usually only only pay interest while the building is going on. The loan will usually have a variable interest rate so it will go up or down depending upon the market. usually you borrow the final estimated cost of the property and draw on the money as and when you need it.
When the construction is completed you start repaying the principle as well as the interest. Obviously at this stage none of the principal has been paid off, you have only been paying interest up till now.
The bank I worked for offered a pretty good rate but some construction loans can prove quite expensive so I would suggest you check out a few a compare before choosing. |