Getting approved for a construction loan is a different process to applying for a standard home loan on an existing home.
The first thing you’ll need to do to ensure a smooth application process is to present the lender with professional plans for your property. A property appraiser will then go over these plans to determine the expected value of the property when completed.
This is because when you apply for a construction loan, the lender considers the expected value of the property upon completion of construction as well as the total amount required to borrow in order to pay the builder.
Once this has been done, the lender will then ask you to approve a loan offer for the property. You will then have to make a deposit, as you would with most other types of home loans. This acts as a security at this stage of construction, and a larger deposit will convince your lender of your trustworthiness.
We at Pay Off Home Loan simplify the whole process and take the stress out while you focus on getting your dream house build for your family to move straight in.