Do banks typically charge a separate inspection fee for loan officer's inspection trips? Management is considering charging a set amount for under 25 mile radius and another fee for over 25 mile radius. I thought that his would be covered in the 1% origination fee charge. Please let me know if your bank does this or if you have opinions on this practice.

Thanks

We charge different "extra" construction fees depending on the number of draws the customer states they will need and then we hold them to that number. It is not considered part of the origination fee that a regular loan would have. Inspecting a construction loan is considerably more work than a regular loan.

Ok, thanks. Do you ever waive the fee, or, is it a "set" fee listed on your rate sheet or in your procedures?

The number of draws are set before the loan closes and stated in their commitment letter. IE: "You will be allowed four construction draws for this project-if this will not meet your needs, please inform us before the loan is set for a closing."

We base the number of draws on the experience we've had over the years. A full- normal house construction is four draws. This is a construction that would take about 6 months to complete the home. Then it goes up or down from there. Not all construction projects are created equal. An addition might be two or three- and large home, might be 6 or 8. We have pre-established draw options based on the amount of the construction funds to be drawn.

Thanks again for the information. Very helpful.