During the construction phase of a construction loan, the borrower typically:
Correct Answer
C) Makes interest-only payments on funds actually disbursed
During construction, borrowers typically make interest-only payments on the amount of funds that have been disbursed to date, not on the full loan amount, since the full amount has not yet been advanced.
Why This Is the Correct Answer
During construction, borrowers typically make interest-only payments on the amount of funds that have been disbursed to date, not on the full loan amount, since the full amount has not yet been advanced.
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