Posted on: 05th Mar, 2010 08:11 pm
What is a two part loan? It has to do with a mortgage...
Hi sungirljo,
A two part loan seems to consist of a construction loan and a mortgage. First, the borrower takes up a construction loan to build the house. The construction loan is generally an interest only loan. Once the construction is complete, the borrower can take a new mortgage in his name and pay off the existing construction loan. The interest rate on a construction loan is usually higher than that on a mortgage loan.
A two part loan seems to consist of a construction loan and a mortgage. First, the borrower takes up a construction loan to build the house. The construction loan is generally an interest only loan. Once the construction is complete, the borrower can take a new mortgage in his name and pay off the existing construction loan. The interest rate on a construction loan is usually higher than that on a mortgage loan.