A borrower is building and wants to avoid paying closing costs twice on a 9-month build followed by permanent financing.
Correct Answer
A) A single-close construction-to-permanent loan, closed once at the start
A single-close construction-to-permanent loan closes once and converts to the permanent phase when the build is complete, so the costs are paid once. Other choices: two-time close is a real structure but not the only one; a bridge loan is short-term borrowing against an existing property and does not convert; and a home equity line requires equity in a property that does not exist yet. Source: Construction-to-permanent single close
Why This Is the Correct Answer
A single-close construction-to-permanent loan closes once and converts to the permanent phase when the build is complete, so the costs are paid once. Other choices: two-time close is a real structure but not the only one; a bridge loan is short-term borrowing against an existing property and does not convert; and a home equity line requires equity in a property that does not exist yet. Source: Construction-to-permanent single close
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