Real Estate LoansReal estate loans include home mortgages, home construction loans, and loans to acquire various business properties. They also may include any improvements to physical properties, including additions, landscaping, parking lots, dividing and opening up rooms within a building, and adding such fixtures as fireplaces and swimming pools.
Borrowers who take out real estate loans may be individuals purchasing single-family homes. They may be developers, seeking to build a shopping center, hotel, or office building. Or they may be investors seeking to purchase a particular income property.
There are two basic types of real estate loans:
- Short-term construction loans. These generally are for a period of a few months or so, during the construction of a home, office, or other building.
- Long-term mortgage loans. A mortgage loan may stretch out to 30 years (40-year mortgages do exist, but they are not offered by every lender), essentially providing permanent financing for the acquisition of the property.