Since the credit market meltdown construction loans have became scarce and hard to come by, as they are the highest risk loans a lender can make in a down market. Construction loans are based on the future value of the property in that though the appraisal report is being prepared in real time it relies on stability of the market for the value to hold over a year’s period.
Those seeking to build or remodel their home have for over eight years depended on the advice and recourses that are available at www.constructionloancenter.com. And yet since the mortgage market meltdown the site’s visitors were often disappointed to find that no lender was listed in their state.
Things are changing slowly but surely and some three weeks ago we added lender’s in some 6 state which includes a lender for California Construction Loans and 5 additional western states. These lenders were added to the lineup of twenty two states which were organized around six months ago including a Texas Construction Loans originator.
It will be naïve to believe that the same easy guidelines of yester year construction loans still apply. For from it, guidelines have tightened up considerably, loan to values reduced and in most cases two appraisal reports are required.
Stated income construction loans the way they existed in the past are just that, a thing of the past. All loans need to have full documentation and borrowers must prove ample cash reserves.