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If you're considering an ARM, you'll want to check out HSH's comprehensive Guide to Adjustable Rate Mortgages.

If you're considering an ARM, you'll want to check out HSH's comprehensive Guide to Adjustable Rate Mortgages.

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.

Ask the expert
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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