Financing Query
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Land acquisition loan and construction loans are two separate loans.
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Total interest calculated on both loans will be added to the project as total finance costs.
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Typically, you would use a land acquisition loan to acquire the land/site. It accounts for the holding costs (interest on land acquisition) incurred during the time when you are getting ready for construction.
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You may choose not to have any land acquisition loan. This is usually true when you have purchased a site with plans & permits (development approval) that is ready for construction.
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In which case, you would go straight for the construction loan.
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If you will use just one loan, please use a construction loan.
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Total finance costs = Loan loan interest costs + cons. Loan interest costs.
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In this case, they will be…
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Total finance costs = $0 + cons. Loan interest costs.
Here is a video explanation:
