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A How-to Guide for Determining Whether You Can Qualify for a Construction Loan
When it comes to building or renovating homes, many people love it. 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. This can be taken in the form of a construction loan so that you can build your home. First of all, you need to know if you can qualify for the loan. A few people are normally disqualified if they don’t meet the specifications. 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.
Before searching for a construction loan, you should have 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. This proof should be tabled before the lender. hence, you should have this documentation when going to look 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. These details include floor plans, even cost projections, and materials inventories. Failure to provide this, your loan will not be approved. 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. If you are building a new home, you need to hire an appraiser to do the valuation for you. 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.
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. A lender asks for a down payment to prevent losses from people who abandon the project midway. Also, you need to prove your ability to 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.
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