construction loan
Date: Fri, 06/17/2011 - 07:08
We are preparing to build our first home in the fall. We have not gotten our loan yet and I am just nervous about going to the bank. We don't have a down payment, but we own 10.5 acres free and clear. Our debt to income ratio is 10%. We have just paid off our land and one vehicle. Before we paid these two loans, our score was 604. I don't know what it is now...but I am wondering how difficult it will be to get a construction loan for approximately $90,000.
If you go for a conventional loan, you'll have to provide a down
If you go for a conventional loan, you'll have to provide a down payment of around 20%. If you're unable to do so, you'll have to go for a private mortgage insurance (PMI). With the credit score that you have now, it will be better if you could apply for a FHA loan. Such loans are available at a down payment of 3.5% - 5%.
Check your credit report to find out your current score. Lenders
Check your credit report to find out your current score. Lenders will check your score before approving your loan application. You debt to income ratio is good. Your score must have somewhat increased after repaying the loans. The only negative factor is down payment. I will suggest you to accumulate funds for making large down payment. Otherwise, the lenders may charge high interest on the loan.