A construction loan is a loan used to finance the building of a new home. The homebuyer takes out a construction loan to cover the cost to build the house. The homebuyer has one year to complete the house. During the first year the homebuyer is responsible for interest only during the construction phase. They will then will be responsible for Principal and Interest after the first year.
What is a Permanent / Turnkey Loan
A Turnkey Loan relates to house and land packages which are marketed as a complete package at a pre-determined price, prior to the house being built. There is an option that if rates drop during the build of the home there is a free one time option to float the rate down.
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