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Posted on: 16. 9. 2020, by :

Determining Your Eligibility for a Construction Loan

For a home to look impressive, many people normally renovate or flip their homes. Nevertheless, many of them usually lack money to undertake these projects. Good news is that there are many lenders who can loan you the money. 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.

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. When there is no licensed builder, the creditor will not be willing to lend you the money. The builder has to be profitable and prove this. These records should be presented to this company before a loan is issued. 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. Other than only hiring a licensed contractor, you have to provide particular details regarding your project. 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 ruin your plans. It is good to get more info. on this from the lender’s website page. An expert builder will also come in handy.

Your home also has to be evaluated and valued before seeking the loan. The lender will depend on this valuation to know how much to lend to you. It is also advisable to look for an appraiser to value your home. Make sure that your builder has compiled your home’s specifications in a Blue Book. The lender will need one copy of the book. The appraisers also use the blue book to calculate the value of your project.

Prior to getting this loan, you need to have a down payment ready. 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. 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.