The Ins and Outs of Construction Loans

Construction Loans

The Ins and Outs of Construction Loans

The factors affecting loan approval for construction loans are similar to other loan types, aside from a few additional unique factors. Like other loan types, construction loans depend on:

  • Ability to make payments (income).
  • General credit and general financial situation.
  • Property value as- is before the loan closes.
  • Property location.

For construction loans lenders will also look at the following factors:

  • The property’s condition before the loan funding.
  • The amount of cash the borrower plans to spend on construction.
  • What is going to be constructed?
  • Plans and permits.
  • Future value or After Repair Value (ARV).
  • The borrower’s past experience in construction.
  • The contractor resume

A lot could be said of each of these points. There are thousands of combinations amongst the factors since each construction project is different, if ever so slightly, from other construction projects. Our calculator quickly finds the best loan options for your construction loan. It allows you to change scenarios by moving sliders without the need to start all over again. You can update the calculations on the fly depending on various circumstances such as:

  • What if I put less cash down?
  • What if my credit score improves?
  • What if I do a joint venture with an experienced builder?
  • What if I add a bathroom or bedroom?

Unlimited options can be explored and then submitted for actual approval to lenders without having to enter your Social Security Number or other confidential information.

Big banks will finance construction only on big loans, while private investors are happy to fund hard money construction loans through mortgage brokers. You will benefit from the exposure to a large network of hard money brokers and lenders specializing in construction loans.

Our calculator quickly tells you your chances to get a construction loan. It also answers the following questions:

  • What is the highest loan amount and highest LTV I can get?
  • How much cash do I need to have or show?
  • What will be my interest rate and monthly payments?
  • How much money would I need to pay for the loan?
  • What do I need to have or do to qualify for my construction loan?
  • How long will it take to close the transaction?

Enter your ZIP Code in the field below and in 5 or less minutes you will find the answers specifically to your scenario. You can then present your scenario to qualified lenders for actual quotes:

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