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.