12 Questions
What is the purpose of a Construction Loan?
To finance the construction of a new home
How long is the typical term for a Construction Loan?
12 months
What is the purpose of a 'Take-Out' Loan?
To pay off the Construction Loan once the home is complete
What does it mean to Pre-Approve an exit strategy for the borrower?
Make sure they qualify for Fannie Mae and Freddie Mac guidelines post-construction
When does the disclosure of the 'Take-Out' Loan need to happen?
After the completion of the new home
What is the first step in the Construction Loan Workflow outlined in the text?
Speak with potential borrower about project plan
What is the role of AWM underwriting in relation to the 'Take-Out' Loan?
To approve the 'Take-Out' Loan before final approval for the Construction Loan
What document must be uploaded to the Construction Loan among others for verification?
Builders Risk Insurance
What is one important question to ask a potential borrower regarding their land?
Is the land free and clear?
What percentage of the total cost will All Western Mortgage lend up to on a primary residence based on the text?
100% LTC
What approval is necessary prior to submitting a project to underwriting according to the text?
CFSI system training approval
What determines the 'Total Cost to Construct' in the context of the Construction Loan Requirements?
Purchase Price
Learn about the construction loan process involving creating two separate loans - a construction loan used for building a new home, and a 'Take-Out' Refinance Loan which is the final loan the borrower will have. Understand the purpose and duration of a construction loan.
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