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. Good news is that there are many lenders who can loan you the money. Construction loans are usually given for building or renovating your house. 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. 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.
You need to contract a licensed builder before looking for this loan. If you haven’t done this, then you should just forget about obtaining the loan now. When there is no licensed builder, the creditor will not be willing to lend you the money. 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. Before getting a loan, make sure that you have a licensed builder to get an approval.
Another important thing you need to do is to compile the building details. The finance company needs details of your building apart from the ones of the licensed builder. These are inventories of building materials, plans of the floor and even cost projections. Your loan will not go through if you don’t do this. This will ruin your plans. It is good to get more info. on this from the lender’s website page. However, a professional builder will also advise you about this.
Your home also has to be evaluated and valued before seeking the loan. The value of the home will determine how much is lent to you. It is also advisable to look for an appraiser to value your home. The home builder should have compiled the blue book already. One of copy of the blue book should be handed over to the lender for easy processing. The appraisers also use the blue book to calculate the value of your project.
A down payment is another thing that you need to have prior to getting a loan. This should be paid to the lender before you get the loan. This is a sign of commitment to the agreement since some borrowers may abandon the project midway and leave them with losses. Also, you need to prove your ability to repay the loan. This can be done with a credit report. Latest paycheck copies may also be necessary to prove this.