Is this loan fee normal?

Q: My bank wants a 1% origination fee to close on a construction loan. Is this outrageous or "normal".

A: It's probably close to normal. Most construction loans are short-term (usually a year) where you pay interest only, often at the Prime Rate plus a margin. The 1% fee may be credited toward closing costs on any permanent mortgage you obtain from the bank, so ask whether it can be applied.

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Keith Gumbinger
Keith Gumbinger
Mortgage Expert
Vice President, HSH.com
About Keith: Mortgage market observer and analyst with 35 years experience... (more)
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