Independence Day will soon be celebrated and this amazing day will be welcomed by fireworks, family reunions, political speeches, parades, and everything else that we do to commemorate our independence. Things may change a little in how we celebrate this year because of the COVID-19 pandemic, but still, there is a lot to be thankful for.
In the family setting, declaring independence is not only leaving the home when one reaches the legal age but also by moving towards owning a home. If you have been trying to save up to own your dream home, taking out a construction loan may be an option for you. You can choose from three kinds of construction loans that you can avail of depending on your need; construction-to-permanent loan, construction only, or renovation construction loan.
How hard is it to get a construction loan?
Financial experts are one in saying that taking out a construction loan is harder than when taking out other kinds of loans. The reason behind this is because the standards that are being set by the lenders are higher as compared to others. Construction loans usually come with a higher down payment of 20% and qualifying is a bit challenging. Add to those hurdles is the need to have a credit score of at least 680 – the higher the better.
Who offers construction loans?
Don't worry if you feel like getting a construction loan is challenging because there will always be a way for you to get one. If you are a vet, there is a VA construction loan that offers close to zero interest rates.
There are a number of financial entities that offer good construction loan rates
. These lenders will not only require you to have a high credit score and a bigger down payment, you will have to submit numerous documents to facilitate your mortgage need.
Some lenders are good when you want a flexible-use construction loan, better renovation loan rate, while others offer a better loan term. To help you with a hassle-free application, you can check out our One Time Close application
for a competitive interest rate.
Check out available online construction loans calculators
for an idea of how much you need to pay for the duration of your loan.