Construction loans are a type of financing that is specifically designed to fund the construction of a new building or renovation of an existing property. These loans are typically short-term and are used to cover the costs of labor, materials, and other expenses associated with the construction process.

Construction loans are a valuable tool for developers and property owners looking to undertake a construction project. By providing the necessary funds upfront, these loans allow for the timely completion of the project and can help to ensure that it is completed within budget.

It is important to note that construction loans are different from traditional mortgage loans, as they are typically interest-only during the construction phase and require a different approval process. Additionally, construction loans often have higher interest rates and fees compared to traditional mortgage loans due to the increased risk associated with construction projects.