Determining Your Eligibility for a Construction Loan
Many people love building, renovating or flipping their homes. However, this can cost you a lot of money, and many people find it a big challenge. The great news is that you can always obtain money from lenders. This can be taken in the form of a construction loan so that you can build your home. However, you need to assess whether you are eligible for the loan first. If you are not eligible, you may not get the loan. You have to meet the lender’s criteria before getting a loan. 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. You cannot get the loan here if you don’t have this contract. Although lender may offer the money for different projects, they can never risk lending money when there is no licensed builder. In addition to this, the builder should have a profitability and solid building record. These records should be presented to this company before a loan is issued. hence, you should have this documentation when going to look for a loan.
Before looking for a construction loan you need to compile details of the building. Apart from getting a licensed builder, the lender needs some details about the house. These details include floor plans, even cost projections, and materials inventories. Your loan will not go through if you don’t do this. This will ruin your plans. You should seek more details online on these requirements. You can also consult the building expert.
Your home also has to be evaluated and valued before seeking the loan. This will help the lender to know how much to lend to you depending on the value of your home. 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. The lender will need one copy of the book. The appraisers also use the blue book to calculate the value of your project.
Prior to getting this loan, you need to have a down payment ready. The down payment will be paid to the creditor before the loan is disbursed. This will act as a commitment and also to avoid losses to the lender. You also need to show them that you are able to pay back the loan. You may, therefore, be asked to prove this by providing your credit report. Copies of your current paychecks may be required, and finally, you will be handed over the money.