For those who built a home rather than bought an existing one, you might notice that traditional mortgages aren’t applied. Instead, you’ll likely have to get a construction loan.
But what is a construction loan, you may be wondering?
They’re high-interest, short-term loans that cover the costs of building or rehabilitating a home. They’re based on the projected value of the home once the construction is complete, rather than the home’s condition in comparison to other recent sales.
Image via Rhumbix.
