What Credit Score Do I Need for a Construction Loan?
Lenders consider a variety of factors when they evaluate loan applications. They factor in the applicant’s credit score too. In some cases, it can become the deciding factor.
Construction loans differ from mortgages for residential property purchases. They carry more risk since the property does not exist. Ideally, the applicant will bring proof of ownership of the land they want to build the property on. In addition, they will bring solid financials to the table. It helps owner-builders to bring a credit score above 680 to the table. The score shows that the applicant practices solid personal financial habits.
For investors, it depends on their circumstances. For example, they may operate as a sole proprietor who continues to increase their property portfolio. Others operate as a business. Nonetheless, Mortgage House loan specialists consider all those factors when opening a docket for the applicant.
Credit scores don’t paint the entire picture; it rounds it out. Construction projects carry a high risk for lenders. That’s one reason why banks lend conservatively. Mortgage House is a non-bank lender. Thus, we can finance projects that banks see as higher risk. In addition, our loan specialists have proprietary tools that help them find the most appropriate loan terms for most applicants.
Mortgage House also offers several online tools that help homebuyers, owner-builders, and investors understand their financial position before applying. Individuals can also check out our online Mortgage House mortgage repayment calculator.
Credit Score and Construction Loans Conclusion
A credit score does factor into a construction loan application. Mortgage House loan specialists can discuss your options in more detail. Contact our team today.