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There is not much info available on this site about these kind of loans. Ive been looking into them myself, as I would like to build a 2nd home.
From what I can tell, Construction loans are converted to conventional mortgages. So just find as much information on conventional mortgage requirments and you should be fine. Owning your own land also seems to help as well.
If you end up going through the process, please update this thread!
Good Luck
Actually construction perm loans are different from end loans. Most of what we discuss here are 'end loans' - which means the lender is financing a property that is c/o'ed (has its Certificate of Occupancy).
Construction perm loans are construction loans with draws that convert (usually automatically at the end) to a permanent loan. The credit criteria is generally higher. Most of the lenders want a qualified licensed and insured builder for the construction and not a owner builder type (those are extremely difficult). You are better off going through a local or regional lender for a construction perm type loan. You do have to pay interest on the amount drawn during the construction period. I will say it is much easier today to get a construction perm loan than it was even a few years ago - you have many more options.
You will need to provide the lender with plans and specifications, builder will have to be approved by the lender too. Each draw has the appraiser come and inspect to make sure the builder has completed what the draw schedule calls for before the lender will disburse. The builder will have to supply lien releases for all subs involved in that particular draw. The lender will have a very specific loan package for you with all the information you need.
I would stay away from the big box banks though. They are conservative and slow.
I guess I'm asking about my credit and DTI profile. I'm pretty comfortable with understanding a short term construction loan and the transition to a conventional mortgage. Based upon the details above, would I have a shot to qualify?
@Anonymous wrote:I guess I'm asking about my credit and DTI profile. I'm pretty comfortable with understanding a short term construction loan and the transition to a conventional mortgage. Based upon the details above, would I have a shot to qualify?
You said 6 mortgage lates in the last 24 months. When was the most recent late (date)?
You have $4500+ in current debt. Does that include the new house payment or is that additional debt on top of the new housing payment? (not clear from your post).
mortgage lates as recent as 7 months ago will more than likely be a big hurdle to get over. you may have to wait for those lates to be over 12 months.
Yeah, that was just my outright defiance. It's really my land payment but it says mortgage on the credit report. American National Bank of Texas will not allow you to electronically pay your mortgage if you don't have an account with them. I would drive out always a day late. That's totally my fault but I corrected it by opening an account with them, setting up direct deposit from my paycheck to pay the payment and then setup a recurring payment from that account.
Horrible I know and only hurt myself. I always had the money avaiable. Just lazy. Dangit.
@Anonymous wrote:Yeah, that was just my outright defiance. It's really my land payment but it says mortgage on the credit report. American National Bank of Texas will not allow you to electronically pay your mortgage if you don't have an account with them. I would drive out always a day late. That's totally my fault but I corrected it by opening an account with them, setting up direct deposit from my paycheck to pay the payment and then setup a recurring payment from that account.
Horrible I know and only hurt myself. I always had the money avaiable. Just lazy. Dangit.
Are you sure the CRA are showing you as "LATE"? If you are only a few days late, you will not get a baddie. You have to be 30 days late when the next statement cuts to be 30 days late. For example, if your note is due on the 1st, and they give you a 5 day grace, you have until the 31st to pay as the statement cuts on the 1st. You will have to pay late fees after the 5 days but that is all.