Click on the above image to download the

definitive E-book for obtaining the best

construction loan!

Table of Contents

Qualifying for your construction loan, exactly how is it done?

The first thing your loan officer wants to see is your completed loan application. The loan application called the (1003) will tell a story of your financial picture. The completed loan application will tell the loan officer many things including,

1. What type of loan you want.
2. How much money you need.
3. Where you currently live.
4. If you rent or own.
5. Your social security number.
6. Your current employers.
7. A list of all your assets (money) and liabilities (bills).
8. How much money you make.
9. How much real estate you own.
10. Some declarations along with some government questions.

Once the loan officer has your loan application in hand they can determine whether you can qualify for a loan.

One of the first items pulled in this determination is your credit report. The credit report is going to tell 3 main important things.

1. Show your current credit score. The credit score can range from 500 to 800.
2. Show a complete list of all your monthly liabilities (bills).
3. Show all past credit problems including bankruptcies, foreclosures and late payments.

With this information the loan officer will do an analysis to determine if you can qualify for the loan amount that you're looking for based on the lenders guidelines.

This analysis determines a ratio called the (income to debt ratio) and depending on the banks underwriting guidelines this ratio will usually range from 38% to 50%.

The income to debt ratio is the percentage of monthly debt payments (including your new mortgage payment, taxes and insurance). This ratio should not exceed 36% to 50% of your monthly income.

If you would like to find out how much of a home you qualify for please call my office and I will provide you with a pre-approval and good faith estimate.

 << Previous           Next >>