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• About Us  • View Testimonials  • Construction Programs  • Construction rates  • Comparing Options  - Loan offers from different    banks  -Construction cost estimates  -Building new or remodeling    VS buying an existing home  -Being my own contractor   VS using a general contractor  - Get Answers  • Educational Resources  - ABC's of Construction    Financing  - Stick-Frame Home    Information  - Log/Timber-Frame Home    Information  - Modular Home    Information  - Lending Dictionary  - Construction Dictionary  • Bank  - Refer a customer for a    construction loan  - Learn more about    construction loans  - Receive consultation on setting    up our own construction    loan program(s)  - Get added to the Construction     Advisors network of lenders  - Get Answers  • Contact US   When Should I Qualify for Financing? A borrower who wants to obtain construction financing must get qualified for financing before any planning begins. The smart folks are always prepared. Planning a home, picking builders, getting bids, budgeting, etc. doesn't make any sense if you have no money to pay for it all. Many folks are under the misconception that good, great or perfect credit combined with good income and other things will make them a sure lock for construction financing and that simply is not true. The one thing that no one can guarantee is the collateral that the lender wants will be finished and in a market that makes it worth investing on. No matter how "attractive" the borrower seems they can be turned down or may find that obtaining the terms that they really want are a lot harder than expected. A lender can also be an excellent resource for answers to many questions or problems that can arise along the way. Remember, a good construction lender knows how to make problems easier as they are experienced in the construction process. The lender can also have resources for the planning and budgeting stage to expedite it without fear that you may not be "getting the best deal." It also makes sense to be aware of the lender's policy on draw schedules, if builder approval is required, if they lend on the housing type you are interested in, if they lend in the location you are building in, etc. We don't want to bore you with the overwhelming number of questions that have to be addressed so we will move on to other things. How Do I Qualify for Construction Financing? Lenders will have different requirements when it comes to getting qualified for construction financing. Good construction lenders will qualify you before you even start planning based on a payment that you think is affordable for you. All that is required to do this is to make an inquiry where the lender can review the following: Credit Report. Required by the lender to verify credit history, credit score and the actual amount of debt that the applicant has reported to credit. Employment History. Required by the lender to verify job stability. This will be based on the verbal information you supply in the early stages and later verified by phone with the employer, if applicable, before closing. Income verification. For full documentation loans this will be done by looking at w-2 statements, pay stubs, and/or federal tax returns. This does not apply for Stated Income, No Ratio, Alternate Income, No Income/No Asset or No Doc loans. There will be more information required to obtain an actual approval. The amount of information will again vary by the lender you choose. The more experienced the lender is with construction financing then the less information they will need from you to make their decision. How Much Can I Qualify for? One of the most important questions to have answered before you start the planning stage for building a home is how much money you can borrow to build it. What lenders want will vary but you can expect that most of them will base this decision by many factors and they include but are not limited to the following: Credit. Debt-to-Income Ratio. Calculated by dividing your debt by your gross income. This may not apply for some alternate income loans such as No Doc, NINA or No Ratio. Down Payment. Most lenders may want as little as 5% down or as much as 20% down. Construction Advisors does not require down payment for qualified applicants. Type of Home. Most lenders have restrictions based on the type of home you are building. Location of Land. Most lenders have restrictions if you are building in rural property areas. Amount of Acreage. Most lenders have restrictions if you own more than 10 acres of land. Experience the Construction Advisors difference today —Contact Us to get started!

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