How to Know if You are Eligible for a Construction Loan
Many people love building, renovating or flipping their homes. However, in most cases only one thing will stand in your way, and that is money. However, you can obtain a loan from the many lenders available. 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. Many people usually seek these constructions loans, but they are denied it because of their ineligibility. The lenders will only give credit to the eligible persons. 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. The reason behind this is that the lender cannot risk their money. There should also be a profitability record from the builder. 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. Other than only hiring a licensed contractor, you have to provide particular details regarding your project. 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 put you in a fix especially if you don’t have building experience. It is good to get more info. on this from the lender’s website page. 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. One of copy of the blue book should be handed over to the lender for easy processing. It will also be helpful to the appraiser.
A down payment is another thing that you need to have prior to getting a loan. The down payment will be paid to the creditor before the loan is disbursed. A lender asks for a down payment to prevent losses from people who abandon the project midway. You also need to show them that you are able to pay back the loan. A credit report can be used to prove this. Latest paycheck copies may also be necessary to prove this.