Construction Loan

New home construction loans are short-term financing options that cover the cost of erecting a new house during the actual building process. With a new home construction loan, you can usually draw money from the loan five to 10 times that coincide with stages of construction, such as pouring the foundation, framing and installation of heating and cooling systems, as well as the finishing work, like painting and installing carpeting.

Many large builders provide a construction loan for buyers who pay an initial deposit. In most cases, construction loans are converted to or replaced by a standard mortgage once construction is complete.

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