Determining Your Eligibility for a Construction Loan
When it comes to building or renovating homes, many people love it. Nevertheless, many of them usually lack money to undertake these projects. 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. 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.
Before searching for a construction loan, you should have a licensed builder. You will not be given any loan if there is no contract with a licensed builder. 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. Apart from getting a licensed builder, the lender needs some details about the house. They have to see detailed floor plans, even cost projections and comprehensive materials inventories. If you don’t give these details, they will assume that you are hiding something and reject your application. This will put you in a fix especially if you don’t have building experience. You should seek more details online on these requirements. An expert builder will also come in handy.
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. You need a blue book compiled for your home. Before processing the loan, the creditor will need this book. The appraisers also use the blue book to calculate the value of your project.
Before looking for a construction loan, you also need to have saved for the down payment. 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. Again, you will need to show that you can repay 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.