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A builder can expect interest on his construction loan to be charged

a) Annually
b) Monthly
c) Only at project completion
d) As a lump sum at the start

User Olambert
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1 Answer

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Final answer:

Interest on a construction loan is typically charged monthly during the construction phase. These are short-term loans with interest-only payments until the project is finished, after which the loan converts or is paid off.

Step-by-step explanation:

A builder can expect interest on his construction loan to be charged monthly. This is because construction loans are typically short-term loans that are used to finance the building of a home or other real estate project. The nature of these loans is that they have variable rates that accrue interest on the outstanding balance, which is usually calculated on a monthly basis.

The interest payments are generally interest-only, meaning the builder pays only the interest on the loan each month during the construction phase. Once the project is completed, the loan often converts to a standard mortgage, or the builder must pay off the remaining balance, possibly through refinancing or with the proceeds from the sale of the property.

User Ricardo Cunha
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