Construction Loans · Land Home Package Investing

Construction Loans

I'm curious to the group's thoughts on this... my local bank will give me a construction loan for this project, but here are the terms:

"The bank can lend up to 75% of your total project (which includes the building cost). Your equity injection would be 25% down and if you purchased the land before hand with cash, we can use that as part of your 25% down. Typically, our construction/development loans are for 12-month terms with an interest rate of the Prime rate floating (Prime is at 7.25% as of today). The monthly payments are interest only on the amount drawn."

Is this favorable over private lending @ 12-13% What do y'all think?

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