Finance
In Tennessee, the 'loan-to-cost' (LTC) ratio used in construction lending compares the:
ALoan amount to the appraised value of the completed project
BLoan amount to the total project cost (land plus construction)✓ Correct
CMonthly payment to total construction costs
DDown payment to the cost of materials only
Explanation
The loan-to-cost ratio compares the construction loan amount to the total development cost (land cost + construction cost), used by lenders to assess risk during the construction phase.
Related Tennessee Finance Questions
- In Tennessee, a lender who 'calls' a loan is exercising the right to:
- A home equity line of credit (HELOC) differs from a home equity loan in that a HELOC:
- The Tennessee Housing Development Agency (THDA) provides:
- A 'points' buy-down in a mortgage means the borrower pays upfront to:
- A Tennessee borrower's 'good faith' deposit with a lender at loan application:
- A Tennessee lender who provides a 'non-QM' (non-Qualified Mortgage) loan is offering a loan that:
- The primary benefit of a 15-year mortgage compared to a 30-year mortgage is:
- Private placement (real estate syndication) allows investors to pool funds to purchase real estate. Such offerings must typically comply with:
Practice More Tennessee Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Tennessee Quiz →