Combination loan

Combination loan,

Definition of Combination loan:

  1. A loan transaction that involves two separate loans for the same borrower. The first loan is used to pay for the construction costs of a new home at the completion of construction. The additional loan is used to pay for the initial loan and becomes the permanent mortgage on the home. The first construction loan is typically an adjustable-rate mortgage with the second loan being any one of the available mortgage rate types.

Meaning of Combination loan & Combination loan Definition