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Construction management is a discipline comprising systematic approaches to control time, cost and quality of
a construction project based on recorded research and experience.
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Construction Loan Mortgages Finance Dream Homes and Vacation Properties
By Bruce Owens
Construction loan mortgages can turn a vacant piece of land – whether in a not-as-yet developed
suburban tract, or the wilds of a favourite rural escape – into a person’s dream home, chalet or
vacation retreat. Because these loans are the vehicles that turn a person’s vision of where they would
like to live, or where they would like to vacation or retire, they are sometimes referred to as “dream
loans’. And everybody has to have a dream.
Construction loan mortgages are typically designed to start as an interest-only loan under which funds
are released to the homebuilder in stages as construction progresses. So much is released to
purchase the property, so much when the foundation is built, when the structure of the home is
enclosed etc. Ultimately, when construction is completed and an occupancy permit is issued, the
interest-only construction loan is then rolled into a home mortgage with the standard amortization
terms and payment structures etc. of a normal home mortgage.
During the construction phase of building such a “dream home”, the construction loan that funds the
project will typically be an interest-only loan with variable rate interest. After all, in most instances the
person who financing construction of his or her dream will most often be living off property in a second
home, or otherwise renting or paying for accommodation. Upon completion, the construction loan is
paid off, and a regular mortgage is drawn up on the property. The advantage of a construction loan
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