Finance
In Louisiana, a 'construction-to-permanent loan' is beneficial because:
AIt requires two separate closings saving money
BThe construction phase financing automatically converts to permanent long-term financing at completion, requiring only one closing and set of closing costs✓ Correct
CIt eliminates the need for appraisals
DIt is guaranteed by the state of Louisiana
Explanation
A construction-to-permanent loan combines construction financing and permanent mortgage in one transaction — only one closing is required. This saves borrowers duplicate closing costs compared to getting a separate construction loan and then a permanent mortgage.
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Key Terms to Know
Closing Costs
Fees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
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.
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.
Math Concepts
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