A construction loan is a short-term real estate loan utilized to finance building costs. Funds are disbursed as needed or according to a prearranged plan, repaid upon project completion, often from a mortgage loan. These loans typically come with higher interest rates and origination fees.
An origination fee is a charge imposed by lenders on borrowers, particularly for mortgage loans, to cover the costs associated with issuing the loan. It can encompass a variety of expenses such as the salesman's commission, credit check, appraisal, and title expenses.
