How Will My Credit History Affect Getting a Construction Loan?

Your credit history doesn't have to be perfect for you to get a loan for just the right house you want to build. According to many home construction lenders nationwide, you can work with a lender to finance almost every facet of your project even if you haven't achieved a great credit history in the past. Your construction lender will work with you to obtain a construction loan and to assist you in finding permanent financing once the house is finished.

Here's an example: your lender helps you get a construction loan of $200,000 to buy property, materials, and pay subcontractors. But the appraised value of your finished home may be $240,000 or more. The $40,000 serves as your equity, or your down payment on your permanent loan.  You have equity, and that means that you can obtain a mortgage with monthly payments that you can afford.

Generally, home construction lenders seek owner/builders who have: a decent credit history in recent years (sometimes two, but this varies), make at least $30,000 per year, and the determination to work hard to build their dream house. Plus, you will pay no money down, no upfront fees are required, and no payments will be required during the construction of your home!

A consultant will work with you to find the right design for your family and your budget.
You will become the manager of the most important project of your life, overseeing the construction from start to finish. And you don't need to be an architect or an engineer to accomplish this, because many inexperienced owner/builders successfully work with a building company that guides them through the process.

Your "construction counselor" will help you find subcontractors and decide which parts of the construction you might want to tackle yourself -- saving thousands in the process.

First, do the research. And then begin to consider what kind of house you want to build. You don't have to be a millionaire to make your dreams come true.