Are you interested in building a residential or commercial property from scratch? If so, it’s going to cost a lot of money for you to do it.
It costs more than $300,000 on average to build a home. And it costs a whole lot more than that in most cases to put together the plans for a commercial space. It can make it almost impossible for you to afford to pay for it on your own.
Fortunately, you’ll have the option to take out a construction loan if you would like. You can get a great construction loan rate that will allow you to build the residential or commercial property of your dreams without having to worry about a thing in a financial sense.
Today, we’re going to talk with you about how to secure a construction loan from start to finish. Learn more about doing it below.
Decide How Big You Want a Residential or Commercial Property to Be
Before you even think about beginning to apply for a construction loan, you’re going to need to assemble your plans for a residential or commercial property. You should know where you’re going to put this property and, more importantly, how big that it’s going to be.
Most construction companies are going to charge you a certain amount of money per square foot when building a residential or commercial property for you. As a result, you’re going to need to figure out what the size of your property will be when it’s finished so that you can get a rough idea of what it’ll cost you.
Calculate the Cost to Build a Residential or Commercial Property
Once you know how big your residential or commercial property is going to be when it’s finished, you can start to calculate the cost of it.
You should take the size of the building that you’re going to be constructing into account when you’re doing this. You should also take all of the different finishing touches into account so that you know what it’ll cost you to bring the ideas that you have to life.
After you’ve done all of this, you should be able to calculate exactly how much money you’re going to have to borrow as part of a construction loan.
Look for Lenders That Can Provide You With a Construction Loan
Not all lenders are going to be cut out to provide you with a construction loan. Since construction loans tend to be on the higher side, there are some lenders that don’t offer them.
With this in mind, you’ll want to make it a point to create a list of lenders that can help you obtain a construction loan. You can Google things like “renovation construction loan” or “construction loan for investment property” to get some options in your area.
Ideally, you want to avoid simply working with whichever lender you find first. You should instead look for a lender that’s going to be able to extend the right construction loan rate to you.
Find Out More About Each of the Construction Loan Lenders You’re Considering
After you’ve compiled a long list of lenders that specialize in dishing out construction loans, you should learn as much as you can about each of them. You can do this by:
- Visiting their websites and reading their “About Us” pages
- Checking out their social media accounts
- Reading online reviews that other people have left for them
As we alluded to a moment ago, you don’t want to work with just any old lender when you’re trying to secure a construction loan. You want to work with one that’s going to provide you with the best rates possible while setting you up with a great experience overall.
Click here to see a great example of a company that you should strongly consider working with.
Apply for a Construction Loan Through the Lender You Like the Most
When you get to this point, there should be one construction loan lender that you like more than all the rest. You should feel free to apply for a construction loan directly through them.
A great lender is going to make it extremely easy for you to do this. You should be able to fill out an application right on their website so that they can begin considering you for a construction loan.
They should also be available to answer any and all questions you might have about taking out a construction loan. It’ll make the construction loan process slightly less stressful than it would be otherwise.
Take the Necessary Steps to Get Approved for a Construction Loan
Once you’re done filling out an application for a construction loan, a lender will begin the process of scrutinizing your application to see whether or not they’re going to give you a loan. During this process, they might ask you to provide them with additional information.
They’re going to want to know more about your income. They’ll also want to know how big of a construction loan downpayment you want to put down.
You should be prepared to provide a lender with any and all information that they might need. It’ll make it possible for you to get your construction loan approved much faster so that you can secure the money you’ll need to build a residential or commercial property.
Begin Working Your Way Through the Construction Loan Process Today
You’re not going to be able to take out a construction loan overnight. The construction loan process will usually play out over the course of at least a few weeks, if not a few months.
For this reason, you should begin trying to secure a construction loan sooner rather than later. As soon as you know that you’re going to need one, you should start looking for a lender to help you.
Keep everything that we discussed here in mind. It should give you the chance to lock up a construction loan in no time.
Browse through the other articles on our blog for more tips on how to take out a loan.