These requirements could keep you from breaking ground.
So you’ve already done the work of securing a lot in the neighborhood of your choice. Congratulations! The next step is to build a home that will be a haven for you and your family. A construction loan (short-term loan taken out by home buyers or builders that are usually one year in length) can be useful to cover construction expenses while your home is being built.
Once complete, you’ll move into a traditional long-term permanent financing mortgage either by one-time close construction loan or conventional mortgage.
In our experience of helping hundreds of Texans build their homes, we’ve discovered 3 loan requirements that can slow down the construction loan process. In addition to your personal financial information, here are the three must-haves for getting a construction loan:
You will need to present a detailed construction plan and blueprints to your lender. The construction plan should include the project’s projections, timelines, and more. Construction plans will help with the appraisal, as well as the loan amount for the property.
The construction budget goes hand in hand with the plans. The budget will include the cost of materials and labor and should be detailed and be based on the specifications, blueprints, and plans. Using the budget as a guide, your lender, with the help of a home inspection service, will monitor the building process and ensure the builder stays on track.
The builder you present to the lender will be carefully examined to ensure they can execute the task. The bank will check the builder’s financial stability and review their references. This step is in your best interest as it helps to ensure that the builder is reputable and suitable for the job.
Final Thoughts on Getting Ready for a Construction Loan
We’ve helped hundreds of Texans build their home. It’s a rewarding experience and we understand that you are anxious to break ground. In order to get off to a quick start, it’s important to be prepared with an approved builder that has a complete budget and plans for your build. Let our mortgage lenders be a resource for you; schedule a conversation and leverage their experience to answer all of your questions about the construction loan process.
Texas Regional Bank Mortgage, NMLS Number 804865. All loans subject to approval, including credit approval. Some Restrictions may apply. Texas Regional Bank Mortgage may change the products, services, and other information described on this site at any time. Texas Regional Bank Mortgage does business as TRB Mortgage in the State of Texas.