A borrower has a construction-to-permanent loan with a 12-month construction phase. At month 10, construction is only 60% complete due to delays. What is the most likely outcome?
Correct Answer
B) The borrower may need to request an extension and possibly pay additional fees
Construction loans have specific time limits. If construction is not completed within the agreed timeframe, borrowers typically must request an extension from the lender, which may involve additional fees and revised terms.
Why This Is the Correct Answer
Construction loans have specific time limits. If construction is not completed within the agreed timeframe, borrowers typically must request an extension from the lender, which may involve additional fees and revised terms.
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Previous Question
An MLO's compensation plan includes a base salary plus a bonus based on the loan volume originated in a quarter. The bonus structure pays 0.25% of loan volume for the first $5 million, 0.30% for the next $5 million, and 0.35% for volume above $10 million. This compensation structure is:
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Which document is essential for determining construction loan disbursement schedules?