Determining Your Eligibility for a Construction Loan
For a home to look impressive, many people normally renovate or flip their homes. However, in most cases only one thing will stand in your way, and that is money. Good news is that there are many lenders who can loan you the money. The money for building or renovating your house will be given as construction loan. First of all, you need to know if you can qualify for the loan. If you are not eligible, you may not get the loan. Lending companies will only give you a loan if you meet their requirements. Read more here below about knowing if you are eligible for a construction loan from this company that lends the money.
When looking for a construction loan, the first question you need to ask yourself is whether you have contracted a licensed builder. If you haven’t done this, then you should just forget about obtaining the loan now. Although lender may offer the money for different projects, they can never risk lending money when there is no licensed builder. The builder has to be profitable and prove this. These records should be presented to this company before a loan is issued. Before getting a loan, make sure that you have a licensed builder to get an approval.
Before looking for a construction loan you need to compile details of the building. The finance company needs details of your building apart from the ones of the licensed builder. They have to see detailed floor plans, even cost projections and comprehensive materials inventories. If you don’t give these details, they will assume that you are hiding something and reject your application. Lack of money can challenge you especially if you are new to building. If you are new in this, you should read more about this online. You can also consult the building expert.
Prior to looking for the loan, your home needs to be valued. The lender will depend on this valuation to know how much to lend to you. If you are building a new home, you need to hire an appraiser to do the valuation for you. Make sure that your builder has compiled your home’s specifications in a Blue Book. Before processing the loan, the creditor will need this book. The book can also be used for valuing the home.
Prior to getting this loan, you need to have a down payment ready. This should be paid to the lender before you get the loan. This will act as a commitment and also to avoid losses to the lender. Also, you need to prove your ability to repay the loan. You may, therefore, be asked to prove this by providing your credit report. Latest paycheck copies may also be necessary to prove this.