Construction Loan Questions???

[Anonymous]

OK, I am in the act of repairing my credit with the ultimate goal being building our dream home.

So, here are some questions and info about my situation.  First my Equifax score is 579 (has raised 40 points in a month - YAY!!!), my wife's is probaly a little better - I would venture to say 620 - but I don't know.  Second, this is not an immediate thing.  My goals will be Jan. 2010, July 2010, or Jan. 2011 - if any of those can be achieved then that would be awesome.  I make about $45,000/yr and the wife makes about $30,000/yr.  I will be looking for a $175,000 - $225,000 loan.  By the time of build I will own the property worth $25,000 - $30,000 and have very little debt left to pay.  So, I know that I need to get another $20,000 or $30,000 cash raised which will be a challenge but doable if I bank all my bonuses and tax refunds.  I guess I only have one question...

If I can get my credit up to 650, have the land free and clear, another $20,000 for down payment, and cut overall debt - would this loan be feasible....Also, my wife might be able to get another $10,000 to go toward down payment with her job.

What hurdles to jump in what order?

Other obstacles?

Any other iformation...

[ShanetheMortgageMan]

Debt ratio looks fine, and down payment should be enough too, but there isn't any way to say if your credit will be OK or not 6-18 months from now.  It's like hitting a moving target, you just want to try the best you can, don't stop at any particular point.  I wouldn't even inquire about guidelines until you are closing in on a 620 score, and then start dialog with construction lenders on what they are looking for (most likely it'll be 660+) so you can finish up your credit improvement plan.  But for right now, go full on out on correcting everything that is able to be.

[Anonymous]

AHhhh!! Confirmation, I actually was thinking of going to talk to banker when I hit 620.