What Are the Construction Loan Qualifications?
Financing a home purchase that exists on the market differs from financing a construction project. Since the property does not exist, lenders face financing a property that doesn’t exist. When the applicant doesn’t own the land yet, it adds another layer to the situation. Obtaining a construction loan is more difficult than obtaining a mortgage.
Construction loan qualifications include submitting:
- Proof of land ownership
- Building plans
- Contract with a licensed builder
The applicant must show that they have the crew and permission to build on the land. Failing to obtain the proper permits can stall and cause the project to stop in its tracks. Even though the project stalls, the borrower remains responsible for the outstanding loan amount. However, if they won’t see income from the project, some will walk away from it.
Therefore, lenders seek to create a situation where both parties will profit. Mortgage House partners with owner-builders and investors on construction projects. Thanks to our proprietary tools, our loan specialists can find competitive terms in most cases.
Once an applicant submits the necessary financial documentation and requirements, the process moves forward. Our loan specialists help applicants prepare their paperwork before applying.
Mortgage House takes the same approach with homebuyers seeking to finance their first, second, or investment property. We offer several online tools such as our home loan calculator for free and no strings attached.
Construction Loan Qualifications Conclusion
Several construction loan qualifications exist. Mortgage House helps owner-builders and investors prepare by providing guidance. To start the process, contact our loan specialists.