Tips for The Average Joe
How to Know if You are Eligible 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. The great news is that you can always obtain money from lenders. Construction loans are usually given for building or renovating your house. However, you need to assess whether you are eligible for the loan first. 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. 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. Therefore, it is crucial that you get a licensed and professional builder so as to qualify for a loan.
It is vital that you also compile details of the building beforehand. Other than only hiring a licensed contractor, you have to provide particular details regarding your project. They have to see detailed floor plans, even cost projections and comprehensive 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.
Prior to looking for the loan, your home needs to be valued. This will help the lender to know how much to lend to you depending on the value of your home. It is also advisable to look for an appraiser to value your home. The home builder should have compiled the blue book already. The lender will need one copy of the book. It will also be helpful to the appraiser.
Before looking for a construction loan, you also need to have saved for the down payment. Even when your loan is approved, most lenders will demand a down payment before disbursing the loan. 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. This can be done with a credit report. Latest paycheck copies may also be necessary to prove this.