Things You Should Know About Private Construction Loans

Location

• Key to securing your private money construction loan

• It is important that your lender is comfortable with your project’s location

Project Planning

• Key factor on your construction loan approval

• Cover every detail of how your completed project will turn out

Project Planning

• have a reliable and qualified contractor

• formulate a budget to ensure the completion of your project

Skin in the Game

• have your own money readily available as a financial backing

• lenders may approve funding to as much as 70 percent loan-to-value of the appraised value.

Down payment

• Ask about down payment requirements for your project

• May be 0 down payment or may be 10%; depending on the lender

Rates and fees

• Vary from lender to lender

• Show your lender the profits that they can make

• Fees are higher than the traditional lending institutions

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