Sometimes building exactly what you want is a better option than trying to buy an existing property for residential or commercial use. Construction loans have a more rigorous approval process than loans for existing properties, however, owing to the higher amount of risk and uncertainty associated with a construction project. How can you maximize your chances of a swift approval at a competitive rate? Here are some recommendations.
- Get your documentation ready. Go into the loan process with as much concrete documentation as you can. Exactly what that entails will depend on whether you are building a home or a commercial property. Just make sure you have covered everything you can think of in detail.
- Boost your qualifications. As with any other type of loan you would apply for, increasing your credit score and income while improving your debt-to-income (DTI) ratio can help you qualify for a construction loan.
- Have your blueprints, building permit, team and project timeline ready. One of the keys to a successful construction loan application is getting as many of your project details cemented as possible before you apply. If possible, you should have a compete set of blueprints, and an experienced builder selected. You should already have successfully applied for a building permit, and have a specific and realistic timetable for your project. You should document all of this during the application process. If you were to try to apply without all of these project details in place, your project would appear more hypothetical and higher risk.
- If applying for a commercial loan, have a clear business plan and budget. When your project is commercial in nature, it is not just the viability of the building that is critical, but the viability of your business. You will need to provide a business plan, budget projections, cash flow statements, and all other documentation necessary to show that you will be bringing in the income necessary to pay off your loan in full.
Apply for a Construction Loan in Oakhurst or Beyond
Granite West Funding makes the construction loan process simple and straightforward. During your consultation, you can tell us about your project, and we can guide you through the application steps, including the documentation you will need. If you are ready to build a home or commercial property in Oakhurst or elsewhere in CA, please give us a call at (559) 540-2275.
