Pros of Construction Loans

1. Flexible Repayment Options: Construction loans typically offer flexible repayment options, allowing you to pay off the loan in full or in installments as construction progresses.

2. Low Down Payment: Construction loans often require a lower down payment than traditional mortgages, making them more accessible to borrowers with limited funds.

3. Interest-Only Payments: During the construction phase of the loan, you may be able to make interestonly payments, which can help reduce your monthly payments and free up cash for other expenses.

4. Lower Interest Rates: Construction loans typically come with lower interest rates than traditional mortgages, making them more affordable over the long term.

5. Tax Benefits: Interest paid on a construction loan is tax deductible, allowing you to save money on your taxes each year.

 

Cons of Construction Loans

1. High Interest Rates: Construction loans typically carry higher interest rates than traditional mortgage loans, making them more expensive in the long run.

2. Short Loan Terms: Construction loans have shorter loan terms than traditional mortgages, which means borrowers need to pay off the loan quickly or face significant penalties.

3. Difficult to Qualify: It can be difficult for some borrowers to qualify for a construction loan due to their credit score, income level, and other factors.

4. Risk of Delays: Delays in the construction process can lead to additional costs and fees that are not covered by the loan.

5. Limited Funds Available: Construction loans typically have limited funds available, meaning borrowers may not be able to borrow as much as they need for their project.

 

If you believe your business is ready for a construction loan or you have questions, please get in touch with Filthy Rich Idea at 888-369-4332 to find out more info or fill out our online application today for a business loan. We got your back!

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