Construction Loans Explained

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In this video, we're talking about construction loans or more specifically the main differences between conventional purchase and refinance loans and construction or renovation loans.

The qualifications are different, the requirements are different, and it's much more difficult to get a construction loan than it is to get a conventional loan.

[00:00:30] Loan Purpose
[00:00:52] Loan Disbursement vs. Draw Schedule
[00:01:40] Fixed Rate vs. Variable Rate
[00:02:09] Down Payment Requirement
[00:02:40] Net-Worth & Guarantee Requirements
[00:03:31] Risk Premium
[00:04:30] Payment Terms
[00:05:01] Flexibility in Terms
[00:05:53] Loan-to-Value (LTV) vs. Loan-to-Cost (LTC)
[00:06:28] Short-Term vs. Long-Term
[00:06:57] Get Help on Get a Construction Loan First



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[ellef]

Dumb question: when we obtained a construction loan the interest reserve was added to it (around $35K I believe), is that interest now tacked onto (rolled over) to the mortgage loan once construction is done?

[kasokachibanga]

I prefer a conventional loan 💵 to a construction🛠 loan.