If you are quite familiar already with the normal mortgage financing then the home construction financing or loans are a bit different. Let us put it this way, you actually get a mortgage loan to buy a property however, if you don’t have plans of buying and you just want to remodel your property or fully improved it then home construction financing is what you need and not a mortgage. However, once your property’s construction is done then it would be put on mortgage to pay off the loans spent on the construction. Are we clear on that?
For whom is the home construction financing?
This type of loan is for those who want to remodel or reconstruct their old properties and no budget available for the mean time. You don’t need to wait for you to earn that big amount of cash to start the construction. You can start your home project as soon as the loan request is granted. Thus, you can start beautifying your property with no wasted time in the process.
Just put in mind that home construction financing is still a mortgage though the mortgage process will start once the property had been reconstructed. In relation to that, this is also for those who are capable of paying mortgage loans including upfront payments and of course, the interest fees.
What do you need to get a home construction loan?
Because home construction financing is also like a mortgage financing in a different perspective, the requirements are quite the same as well. You need to prepare the following to get yourself a home construction loan and start your plans immediately.
- Construction budget
Just like with mortgage that you need the estimate price of the property you want to buy, you also need to prepare the estimate start-up construction price upon presenting your loan request. Depending on the size and scope of the construction, the size will matter so we recommend that prior to obtaining your construction loan, ask your contractors to give you a detailed budget needed for the entire project.
Have all your financial papers and proof of credit-worthy on-hand. These are still the major requirement prior to getting a home construction financing. Make sure you have your bank statements, proofs of income, employment documentation and the likes. You can also secure your credit score and credit history so whenever your lender wants to see them; you have something to show them. Securing all these documents upon presenting your loan application to the lender will help you save a lot of time and you can proceed to your construction project as soon as possible. Thus, you can have your house rebuilt and resell if you want to or if you have any other plans then you can go through over them.