How do i find someone to see if i'm eligable for a loan to build a home.?

Question

I want to beable to build my own home, but how do i know if i'm eligable for a loan. Who do i talk to, or where do I go?

Answer 1

Try a mortgage broker. They won't cost you anything (they get paid by the bank if and when a mortgage is approved).

They will be able to give you an idea of how much you can borrow, the best type of mortgage, your repayments, how much deposit you should save and insurance.

Check you yellow pages for some in your area, and ask friends/family for referrals.

Answer 2

Go to a "lender" not a "broker". A Broker cannot make decisions in house, they have to send everything out to the investor and it takes longer.

A "lender" can run your numbers and have an answer for you the very same day. They will need to know what type of home, size and a range of construction costs including land and all costs associated with the construction through a finished home with a "certificate of compliance" (means the town has signed off and you can move in).

Make sure the Lender provides you with a "good faith estimate" and WATCH THE POINTS AND JUNK FEES! Your interest rate will be based on your credit score, the higher the better. Make sure you check with at least two lenders so that you can compare and they will be competitive.

You can often get a good package for purchase of the land with 20% - 30% down and then the construction funds start to be paid as you build and then at the end you can have a 95% loan for the finished product. That's where the bank will need your cost estimates.

I contracted the build of my own home, but used my friend who is a licensed contractor on the application. Most banks want to know that a contractor is responsible. If you do it the way I did you will want to make sure that it is someone you really trust because the bank may make the checks out to both of you. Every bank is different, but my bank made the checks payable to me and I was responsible for paying the contractors. Some banks do and some don't. Make sure you ask that question at the bank.

Small banks usually have good programs for building and construction loans. If you are in Massachusetts, Michigan, Florida or Rhode Island I recommend the following:

Omega Mortgage 978.537-4114 Bill LaBaire ONLY

I am a Realtor in MA and have used this company for years. They are honest and get the job done. Good Luck. I hope this helped you.

P.S. The first question you ask when you call a mortgage company is: Are you a lender or a broker. A Broker charges more in junk fees, that's how he gets paid........Also check out your local small town bank and Bank of America.

Answer 3

The more places you go the more enquiries on your credit report. Each enquiry lowers your fico score by 2 points. It takes 6 months for the enquiry to disappear and you get those points back. Also, those doing the enquiries can see all the enquires made against you and make them wonder why they said no so they will most likely turn you down as well.

If your credit score is above 650 and your proposed mortgage payment doesn't exceed 30% of your income. Than you will have no problem with your own bank. If your score is not above 650 and your payment is higher than 30% than you need a broker. Pick one that has many lenders. Research this before going to anyone. some brokers just go to the other broker and share commision. Nonetheless, a duty of a broker is to pull your credit once, take your personal info and take it to potential lenders that lend to people in your situation.

Choose a builder that uses his own money. They take a small down and a letter of commital that a mortgage will be there at closing. They will help you with this ie; bring cousin louey to paint the house and the builder will show an additional 3000 down payment. Things like that.

Avoid a builder that says you have to get the construction loan and pay them in stages. This builder can not afford to build this house and will most likely give you 1000 head aches and everything will end up costing extra.

There is a mortgage there for everyone. The worse your situation the more you will end up paying a broker.

good luck

Answer 4

you need to find a peiece of property and most of the time you will need atleast a 50% down payment on the land, check with a bank loan officer to se what they can do for you?