Qualified borrowers must provide proof of their ability to repay the loan. While the number of details may seem extreme, the prepared borrower will move through the loan qualification process without delay. Each step of the construction loan process must be completed in the right order to prevent surprises later.
Preliminary Decisions
One of the reasons that custom homebuilding seems difficult is that the starting point is difficult to find. Lenders require architectural plans and specifications about the project prior to issuing a commitment for the construct to perm loan, however the borrower must know how much money he is qualified to borrow. This circle can stall the project before it gets started so its important that the individuals on the lending side in the early stage know the process and are working with construction/renovation loans as a serious part of their business and not just a once in a while loan opportunity
• Determine location – The perfect place for the custom home must be determined prior to approaching the lender. Even if the land has not been purchased, the lender will want to know about the location for the future home.
