10 Questions
What is the purpose of a Construction Loan?
To finance the completion of a new home
How long is a typical Construction Loan term?
12 months
What is the purpose of a 'Take-Out' Loan?
To refinance an existing home
When does the borrower need to disclose the 'Take-Out' Loan?
After the home is completed
What is the purpose of establishing a Take-out refinance Loan in Encompass?
To ensure the borrower qualifies for the loan after construction is complete.
Why is it necessary to have detailed line items in the draw schedule for a construction loan?
To track progress and ensure completion at each draw request stage.
What is the significance of verifying assets for All Western Mortgage?
To ensure a low-risk loan for All Western Mortgage.
Why is it important to have project approval from CFSI Construction Management before underwriting?
To ensure compliance with construction standards and plans.
What does 'Total Cost to Construct' represent in a construction loan context?
The sum of all expenses including land purchase and construction costs.
What should borrowers provide as proof of insurance according to the text?
Proof of homeowner's insurance coverage.
Learn about the process Overview of Construction Loans and 'Take-Out' Refinance Loans. Understand the purpose and duration of a Construction Loan and its role in financing new home construction.
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