What is Course of Construction Insurance?
Homeowners normally obtain Hazard Insurance (Required by lenders). In the case of construction loans an additional insurance policy is required. This policy, known as Course of Construction Insurance, covers the owner against any claims that may arise out of the construction process, such as personal injury or damage to other property. Course of Construction Insurance, is sometimes paid by the General Contractor, depending on the terms of the contract negotiated. 7- How Do The Loan Payments Work? Normally it is assumed that the construction period will be 12 months. However this may be extended to 18 months. Normally the one time close construction loan is originally written for a 31 year term – 1year construction period and a 30 year Permanent Loan. In construction loans, Interest is paid only on the amount Drawn at any one time, calculated as simple interest. No principal payments are calculated. 8- Why Does The Contractor Have To Be Approved? Construction loans will typically includ
