For construction loans, lenders typically require inspections at various stages. Who usually conducts these inspections?
Correct Answer
B) A licensed appraiser or construction inspector
Lenders require independent, professional inspections by licensed appraisers or construction inspectors to verify work completion and quality before releasing funds at each draw stage.
Why This Is the Correct Answer
Lenders require independent, professional inspections by licensed appraisers or construction inspectors to verify work completion and quality before releasing funds at each draw stage.
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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When comparing adjustable-rate mortgages, an MLO must disclose the worst-case scenario. For a 3/1 ARM starting at 2.75% with 2% annual caps, 5% lifetime cap, tied to 1-year Treasury + 2.25% margin, what would be disclosed as the maximum payment scenario?
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During pre-qualification, a self-employed borrower states their annual income is $100,000. For pre-approval, they provide tax returns showing $75,000 in adjusted gross income after business deductions. How should the MLO proceed?