For you to be able to fund your large and expensive construction project, you will definitely call for contractor funding. While it may sound so simple, acquiring finance for your construction projects, this is never the case in actual sense. Read more here on this website for more on some of the basics you need to know of when it comes to the ways for financing your large construction projects, contractor funding. Here we see some of the issues going into this such as the requirements from both parties, that is fund and the contractor and the various sources of finance.
To begin with, we are going to see some of the bare basics about the contractor funding basics, here talking of the way the loans work, the costs that are involved and the factors that a lender will use to make a decision. To discover more about this product from this company, view here.
The contractor funding concept basically operates on the basic principle of being a double-fund. In this what we see is the fact that one looking for the funding will not receive all their funding at once. Rather, this is where we see the funding being given in two phases, essentially meaning that one will have to serve two separate periods of loan usage and each of these phases being calculated at a different risk level. Learn more about this service by a click on this homepage here.
But all in all, the first phase is where you are given a construction loan. It is with the construction loan that you will get to finance all the activities during the construction. After this, comes the second phase of the loan and this is where you are advanced the permanent loan. A construction loan is what you will make use of to fund all the after-construction needs. See this page for more about these loans as we have the further details about the construction loans here.
Just as we have already mentioned, a construction loan is a kind of loan that you will use for the financing of all the necessary costs you need for the from the start and while the projects is underway. With this particular type of funding, you will be allowed and expected to only make interest only payments for as long as the construction project is still underway. Looking at this, what we see with it is the fact that where you pay these as is due, when your construction project is finally done, all you need to do is to pay the principal value and any balance of interest there may be.