For you to be able to fund your large and expensive construction project, you will definitely call for contractor funding. As a matter of fact, funding for construction projects isn’t as easy as it may be made to sound. 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. This post here actually takes a look at most of the basics you need to know of about contractor funding such as the requirements from both parties, the 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 find out more about this product as is offered by this company, see here.
The contractor funding concept basically operates on the basic principle of being a double-fund. This essentially means that this is a case where one doesn’t acquire all the fianc that they require 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.
The first tranche is where you are advanced the construction loan. This is the fund you are going to use to finance all activities during the construction. After this, comes the second phase of the loan and this is where you are advanced the permanent loan. This is the part of the fund that you will use for funding the after construction needs. For more on these contractor loans, view here for more as we have them detailed.
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. The interesting bit with it is the fact that with it, one will only be required to make interest only contributions back to the fund for as long as the time period for the construction project has not lapsed. As such, when you pay these well enough, all you will be left with to pay after the project is done is to pay the principal value plus any leftover interest.