When I do my math and account for the holding costs in the loan as well as the construction I know I will get the money in draws. Will I be able to pay the monthly interest payments out of the draws or will I have to tweak the figures of construction/repair to make the payments.
I understand how the draws work but what I meant was say the sheetrock demo and reinstallation costs $1500 I’ll say $2000 to recoup money so I don’t have to pay interest payments out of pocket. Just making the numbers work for me.
No, that is incorrect. It will be divided by 12 simply because the interest rate is annual (12 months in a year). So the first amount ($105,000 X 15% = 1312.50 +/-) that you came up with will be the amount that you would be paying back over the entire period of the loan.