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. The money for building or renovating your house will be given as construction loan. Before seeking for this construction loan, it is important that you ask yourself if you qualify for this service. A few people are normally disqualified if they don’t meet the specifications. 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. You cannot get the loan here if you don’t have this contract. The reason behind this is that the lender cannot risk their money. There should also be a profitability record from the builder. This proof should be tabled before the lender. Before getting a loan, make sure that you have a licensed builder to get an approval.
It is vital that you also compile details of the building beforehand. 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. 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. 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. In this case, an appraiser is needed to come and do a valuation for your home. You need a blue book compiled for your home. 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. The down payment will be paid to the creditor before the loan is disbursed. 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. A credit report can be used to prove this. You may also need to provide your paycheck copies.