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Prequalifying for a home construction loan can give you a better idea of the amount you will be granted during the loan process. While prequalification is just an estimate, knowing this amount allows you to start creating a budget for your new home or remodeling project.
Visit at least three lenders to see the amount for which you prequalify. -
Choose the Right LenderWhen filling out loan prequalification paperwork, you may need to provide all or some of the following documents to the lender: recent credit report, bank statements for the past three months, proof of employment, Social Security number, personal and business references and a description of the home improvements or new construction project.
Loan prequalification is not a lengthly process and should only take a few days or less to complete. Because the lender has not done a thorough checking of your assets, credit history or your job history, the amount you're quoted may not reflect the actual loan amount.
It is only during the loan application process that lenders will take a more complete look at your financial background and credit history. -
Obtain prequalification from three or more lenders. Compare not only the prequalification amount, but also the terms of the loan, level of customer service and the overall attitude of the lender. Since prequalification is only the first step in the home construction loan process, choose a lender that focuses on your needs.
Ask lenders for prequalification requirements before filling out any paperwork. Lenders may require a certain level of income or credit score in order to prequalify for a loan.
