A construction-to-permanent loan differs from a traditional construction loan in that:
Correct Answer
B) It automatically converts to permanent financing without a new application
A construction-to-permanent loan is a single loan that automatically converts from construction financing to permanent financing upon completion, eliminating the need for a separate permanent loan application and closing.
Why This Is the Correct Answer
A construction-to-permanent loan is a single loan that automatically converts from construction financing to permanent financing upon completion, eliminating the need for a separate permanent loan application and closing.
More Origination Questions
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?
For a construction-to-permanent loan, when must the initial Closing Disclosure be provided for the construction phase?
During a refinance transaction, the appraiser determines that significant unpermitted additions were made to the property. The appraiser wants to discuss this with the MLO before finalizing the report. What should the MLO do?
An appraiser discovers that a property has significant foundation issues that were not disclosed. The appraiser reduces the property value by $25,000 and includes detailed comments about the structural problems. The loan officer is upset because this will kill the deal. Under AIR, the loan officer:
An MLO's compensation structure includes higher payments for certain loan products. When is it acceptable to recommend these higher-compensated products?
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