What is the meaning of Construction Loan?

Construction Loan is an interim loan that is used to pay for the building of a home as it is constructed. Your lender will make payments to your builder as work on your home progresses. This is generally a short-term loan, but sometimes when the home is completed, the lender will convert the loan to a traditional mortgage. If the lender is not willing to convert the loan, you will either need to pay the loan in full or refinance the loan with another lender.

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APABarry Goldsmith. (2010). construction loan. Retrieved September 20, 2026, from http://smartdefine.org/construction_loan/definitions/1150577
ChicagoBarry Goldsmith. 2010. "construction loan" http://smartdefine.org/construction_loan/definitions/1150577 (accessed September 20, 2026).
HarvardBarry Goldsmith 2010, construction loan, Smart Define, viewed 20 September, 2026, <http://smartdefine.org/construction_loan/definitions/1150577>.
MLABarry Goldsmith. "construction loan" 21 October 2010. Web. 20 September 2026. <http://smartdefine.org/construction_loan/definitions/1150577>