Interim financing

Short-term financing in anticipation of a long-term loan is often called interim financing. Many construction loans are actually interim loans. Construction loans are typically short-term financing that is paid off as soon as the building is completed.
Another form of interim financing may involve obtaining a second mortgage on the applicant’s current home in order to cash out sufficient funds for the down payment on another purchase. These interim financing arrangements are normally not counted against the applicant. However, they must be paid off prior to or during the closing.