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How to Know if You are Eligible 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. Good news is that there are many lenders who can loan you the money. Construction loans are usually given for building or renovating your house. 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 will not be given any loan if there is no contract with a licensed builder. The reason behind this is that the lender cannot risk their money. There should also be a profitability record from the builder. The lender has to see these details before issuing the construction loan. Therefore, it is crucial that you get a licensed and professional builder so as to qualify for a loan.

Another important thing you need to do is to compile the building details. Other than only hiring a licensed contractor, you have to provide particular details regarding your project. 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. Lack of money can challenge you especially if you are new to building. If you are new in this, you should read more about this online. However, a professional builder will also advise you about this.

It is also necessary that you have your home appraised before looking for a construction 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. 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. It will also be helpful to the appraiser.

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 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. You may, therefore, be asked to prove this by providing your credit report. Latest paycheck copies may also be necessary to prove this.

Attributed by: Get the facts