what is the interest rate on a construction loan Construction loans typically have variable interest rates set to a certain percentage over prime (the interest rate that commercial banks charge their most creditworthy customers). For example, if the prime rate is 3 percent and your loan rate is prime-plus-2, then your interest rate would be 5 percent.
You can get an FHA loan that bundles the land and building costs, eliminating the need for high-cost construction loans.
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