A construction home loan in Utah is a short term loan used to pay for the construction of a residential home. (there’s a difference when it comes to buiilding a commercial property vs. building a home).

Basically, a construction home loan acts like a large line of credit. Before the work begins, the loan has a zero balance. As the work progresses the balance of the loan increases to pay the subcontractors and suppliers until all the work is completed and the loan has come to full term or max loan amount. When the work is done the final balance will be paid off with the long term mortgage loan. This video will explain more about how a home construction loan works.