How is the interest calculated and paid on my construction loan during the construction process?
Interest is charged only on the amount of funds that you have drawn on your construction loan. Prior to your loan closing, an interest reserve can be established if you qualify. This account will be used to pay the interest on your construction loan during construction. On the first working day of each month, the actual interest that is due will be debited from this account and paid to Construction Loan One. Construction Loan One will mail a copy of the interest statement, including the amount debited, to the borrower for their records. Once the funds in this account have been used, the borrower will receive a monthly interest statement for any additional interest that is due and owing.
