Construction Loans

1. Construction loans are usually obtained to build a home.

They are the most common type of financing used to build a home, not to purchase a newly built home. It is usually not required to own land in order to qualify for this type of financing program. Depending on the lender, it is possible to finance the building, material, construction and land cost at the same time.

2. Typical construction loans are normally long term loans.

They are usually short term loans. Typically, they are interim loans that must be paid off or refinanced immediately after the construction is completed. Many construction lenders offer services to help manage the scheduling and shipping of the building materials, organization of applicant finances, and even more for an extra fee.

3. You must have good credit to apply for construction loans.

Construction lenders will check for good credit and a stable income before agreeing to finance. It is free to get pre-approved for construction finance loan. Several online services can be utilized to check for pre-approval before choosing one financial institution to work with.

4. Most construction loan lenders have a list of qualifications they require before giving out the loan.

Construction lenders will want to know the plans and specifications of the construction. To get construction financing name and information of the general contractor will need to be provided. Also, an estimate of the construction cost, the title policy and a legal survey of the land that has been purchased (if it has been purchased before applying for the loan).

5. Construction loans can be a wise investment.

Proverbs 11:24-26 - There is that scattereth, and yet increaseth; and there is that withholdeth more than is meet, but it tendeth to poverty. The liberal soul shall be made fat: and he that watereth shall be watered also himself. He that withholdeth corn, the people shall curse him: but blessing shall be upon the head of him that selleth it.

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