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How To Compare Construction Loan Lenders


How To Compare Construction Loan Lenders
If you are building a home for the first time, finding the right construction loan lender for you might seem daunting, especially when comparing lenders and deciding which one has the best options.

Shopping around for the right construction loan means comparing several online reputations, user reviews, and even Better Business Bureau reports in cases where you aren’t sure about one company or another.

First-time loan applicants do well to review third-party lender review websites like NerdWallet and Investopedia, but you don’t have to take their word for a particular lender. Instead, consider doing your own research by copying the methodology of these third-party reviewers. 

How Investopedia Reviews Construction Lenders

Investsopedia’s construction loan review page explains how their writers proceed when comparing loan options. “We looked at 24 construction lenders before choosing the best seven.” 

To be named one of the best, "we wanted lenders that have a broad geographical reach so that our choices could be used by many."

These writers look for construction loan lenders ”with expertise in several construction loan programs so that you’d find several options without the need to interview many firms.” 

The selection process also included companies “whose low end of their interest rate ranges was closest to traditional permanent financing because those are the lowest rates available.”

And there was also preference given to lenders with lower down payment requirements and lower FICO score minimums. That’s an excellent benchmark for a first-time buyer to use when comparing construction lenders on her own.

NerdWallet Construction Lender Review Criteria

Reviewers at this site are fairly extensive, with staff writers or researchers collecting ”over 50 data points from each lender” with a review of company websites, reports, and publicly available documents.

“We may also go through a lender’s pre-qualification flow and follow up with company representatives.”

Is it necessary to do this level of research when comparing lenders before you build a home from the ground up? 

Reviewing lender websites plus publicly available third-party information is crucial, but collecting over 50 data points is likely not, at least not for the individual borrower.

However, doing an extensive review of lender review sites, user reviews, and other public data is a very good way to proceed at this stage in the loan preparation process.

Want More Information About One-Time Close Loans?

We have extensively researched the FHA (Federal Housing Administration) and the VA (Department of Veterans Affairs) One-Time Close Construction loan programs.

We have spoken directly to licensed lenders that originate these residential loan types in most states, and each company has supplied us with the guidelines for their products. We can connect you with mortgage loan officers who work for lenders who know the product well and have consistently provided quality service.

If you are interested in being contacted by a licensed lender in your area, please send responses to the questions below. All information is treated confidentially. 

OneTimeClose.com provides information and connects consumers to qualified One-Time Close lenders to raise awareness about this loan product and to help consumers receive higher-quality service.

We are not paid for endorsing or recommending the lenders or loan originators and do not otherwise benefit from doing so. Consumers should shop for mortgage services and compare their options before agreeing to proceed. 

Please note that investor guidelines for the FHA and VA One-Time Close Construction Program only allow for single-family dwellings (1 unit) – and NOT for multi-family units (no duplexes, triplexes or fourplexes).

In addition, the following homes/building styles are not allowed under these programs: Kit Homes, Barndominiums, Log Cabin Homes, Shipping Container Homes, Stilt Homes, Solar (only) or Wind Powered (only) Homes. 

Contact Us:  Send Us Your Request – Spam Safe 

Please send your email request to [email protected] which authorizes OneTimeClose.com to share your personal information with one mortgage lender licensed in your area to contact you. 

1.  Send your first and last name, e-mail address, and contact telephone number.

2.  Tell us the city and state of the proposed property.

3.  Tell us your and/or the Co-borrower’s credit profile: Excellent – (680+), Good - (640-679), Fair – (620-639), or Poor- (Below 620). 620 is the minimum qualifying credit score for this product. 

4.  Are you or your spouse (Co-borrower) eligible veterans? If either of you is an eligible veteran, down payments as low as $0 may be available up to the maximum amount your debt-to-income ratio per VA will allow – there are no maximum loan amounts as per VA guidelines.

Most VA lenders will go up to $1,500,000 and review higher loan amounts on a case-by-case basis. If not, the FHA down payment is 3.5% up to the maximum FHA lending limit for your county.
 
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