Finance
A Kentucky construction loan converts to a permanent mortgage upon:
ACompletion of construction and issuance of a certificate of occupancy✓ Correct
BThe borrower making the first payment
CApproval by KREC
DRecording of the deed
Explanation
A construction loan converts to a permanent (take-out) mortgage upon completion of construction, typically triggered by the issuance of a certificate of occupancy.
People Also Study
Related Kentucky Questions
- A construction loan differs from a traditional mortgage in that:Finance
- A Kentucky property owner makes monthly mortgage payments of $1,250. The annual interest rate is 6% and the loan balance is $200,000. How much of the first month's payment goes toward principal?Real Estate Math
- A Kentucky buyer's monthly mortgage payment is $1,440. If the annual interest rate is 6% and the loan amount is $200,000, what portion of the first payment is principal?Real Estate Math
- A Kentucky building inspector issues a certificate of occupancy (CO) to a new home, which means:Land Use & Zoning
- In Kentucky, private mortgage insurance (PMI) on a conventional loan can be cancelled when:Finance
- A Kentucky property owner's mortgage payment is $1,650/month of which $1,200 is interest and $450 is principal. The loan balance is $240,000. What is the annual interest rate?Real Estate Math
- A Kentucky homeowner's annual mortgage interest paid was $14,400 on a loan balance that started at $240,000 at the beginning of the year. What is the approximate annual interest rate?Real Estate Math
- A Kentucky home equity loan (second mortgage) is typically a:Finance
Key Terms to Know
Deed
A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Study This Topic
Practice More Kentucky Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Kentucky Quiz →