How to Know if You are Eligible 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. 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. 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 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. This proof should be tabled before the lender. 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. Apart from getting a licensed builder, the lender needs some details about the house. These are inventories of building materials, plans of the floor and even cost projections. If you don’t give these details, they will assume that you are hiding something and reject your application. This will ruin your plans. If you are new in this, you should read more about this online. However, a professional builder will also advise you about this.
Prior to looking for the loan, your home needs to be valued. The value of the home will determine how much is lent to you. In this case, an appraiser is needed to come and do a valuation for your home. The home builder should have compiled the blue book already. The lender will need one copy of the book. The book can also be used for valuing the home.
Prior to getting this loan, you need to have a down payment ready. The down payment will be paid to the creditor before the loan is disbursed. This will act as a commitment and also to avoid losses to the lender. Again, you will need to show that you can repay the loan. This can be done with a credit report. You may also need to provide your paycheck copies.