Loan Origination Activities · 27% of the SAFE examhard
Correct answer: No — the rate was locked at the original closing and applies to the permanent loan
In a one-time close, the rate is locked at the original closing and carries through to the permanent mortgage. If rates drop during construction, the borrower is stuck at the locked rate. This is the tradeoff: one-time close protects the borrower if rates RISE (locked in at a lower rate) but prevents benefit if rates FALL. To get a lower rate, the borrower would need to refinance after construction — a separate transaction with new closing costs. This is why some borrowers choose two-time close: the second closing lets them shop for rates at conversion.
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