Tell me a little about construction loans
A construction loan is a loan that a consumer gets to fund the construction of a new home. It may be just for the period of time of construction, it may also have “permanent” financing as a part of it. “Permanent” financing would be what we all think of as a mortgage. A regular 15, 30 year mortgage.
During construction a borrower will pay interest (at an adjustable rate usually) just on the money they have outstanding monthly most of the time. A borrower may also get a loan which has level payments during construction and afterwards. There will be a period of time for the construction, 3-12 months usually before the construction loan must be converted to permanent financing. Most loans require that the borrower hire a general contractor to supervise construction, yet not all do, expect to pay a higher rate for loans that allow the borrower to be the “GC”.
Construction loans are not simple, they are not standard like a traditional 30 year fixed loan is. Every source of money will have slightly different rules, rates and requirements. If you are looking to get a construction loan, ask a lot of questions, and then ask some more questions again, and most importantly work with someone with proven expertise in construction and renovation loans. They are tricky, a little different than a normal 30 year vanilla loan, but very rewarding.  After all you are building your dream house. Enjoy!
