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🏗️ How Construction Loans Work (Quick Breakdown): When you build a home with a construction loan, you don’t start paying a full mortgage right away. The bank releases money in stages as the home is built, and during construction you usually only pay interest on the amount that’s been used so far. So if the bank has released $200K of an $800K loan, you’re only paying interest on the $200K, not the full loan. Once construction is complete, the loan converts into a regular mortgage with principal
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