Loan Origination Activities · 27% of the SAFE exameasy
Correct answer: One-time close combines construction and permanent financing in a single closing; two-time close requires separate applications and closings for each phase
One-time close (also called construction-to-permanent): single application, single closing, single set of closing costs. The construction loan automatically converts to a permanent mortgage when building is complete. Two-time close: separate applications and separate closings for the construction phase and permanent phase — meaning two sets of closing costs, two credit pulls, and the risk of rate changes between closings. One-time close is simpler and cheaper; two-time close offers more flexibility at higher cost.
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