Some say that the loss of deduction would hurt the home market and fewer people would own homes. Perhaps, but take a look at international home owner figures. So you own a home and want to take out a second. If you have other assets- stocks, mutual funds etc. The lender ends up making a real estate AND a personal loan.
Closing is apparently very fast- two weeks.
A caveat applies with interest deduction. Since the loan consists of real estate AND a personal loan, the IRS might contest part of the deduction as personal interest. After construction is complete, a permanent loan at prevailing rates pays off the construction loan plus covers the entire property. Lastly, here is a unique loan for a business owner who does not want to divulge his entire life and financial history to the bank- absolutely necessary in almost all cases. Using sophisticated formulas, the programs reduce all your personal data and credit history into a numerical score.