Building a new home can be a very stressful experience if you do not approach the task without a solid plan. Nothing is worse than getting partially through the build just to find that something does not work how it is being set up. Or that the contractor you have chosen to go with does not do the job that they were hired to do.
However, the one piece of the process that may be stressing you the most may be getting the loan. This is a common problem that many new home builders have because without the loan, there is no way to continue on.
With that in mind, let’s go over 5 new construction loan tips to consider before building your dream home just so you can maximize your chances of getting the loan so you can get the ball rolling.
- Have A Plan – The lender you are planning to go through will want to see a detailed project plan. If you plan to buy the parcel of land first and then build the home later down the road, that is something they will want to know. If you are doing the entire project at once, that is also something that the lender will need to know. Otherwise, they may not understand why you need the amount of money that you are asking for. Either way you go, they will also want to see the plans for the house to ensure that the building is worth the money they will be loaning you.
- Fix Your Credit – Before you ever try to apply for a loan, make sure your credit is as high as possible. Check out your credit number and history to see if there are any changes you can make to improve it. This is a step that you should consider long before applying for the loan, but if you wait, make sure that you do not open any new credit accounts because it will negatively impact your ability to get a home loan.
- Choose The Right Builder – One of the most important choices you will need to make is choosing the perfect home builder for the job. You need to research the ones willing to work in your area, see some model homes if possible, and talk with them before the plan moves forward just to see how comfortable you are with them. If they can meet your needs and your research has been positive, move ahead with the loan process.
- Discuss Timelines – The construction aspect of the loan, whether you have chosen to go with the construction-only loan or the construction to a mortgage loan, is a short-term loan. This means that the builder that you have chosen to go through will need to stay within those timelines to ensure that the loan contract is met. It is essential to be upfront with the contractor to prevent any surprises. Plus, you can get a schedule set in stone and know when to start applying for the loan. Everything needs to be in sync to ensure the build goes off without major hitches.
- Find The Perfect Lender – Use an online comparison platform to get some leads to the best lenders in your area. Going through this type of platform allows you the ability to compare numerous lenders and the offers that they have for you. Read through them thoroughly and pick the one offering you the best rates, with the best details within the contract.
Keeping these 5 tips in mind will help guide you through the process you should follow before applying for a new home build loan. It is important to remember that not all builders are the same, and not every lender will offer you great rates. You need to take the time to research, read reviews, and talk to people that have gone through the process already. This is an important step forward in your life; as such, you want to make sure that it goes as smoothly as possible.