Transcription: Colorado Springs Mortgage
Steve: This is stevecurrington.com and the Steve ‘N Tyler Show episode number 76.
Voice Over: Welcome to the Steve ‘N Tyler Show, with stevecurrington.com and Tyler Whyburn.
Steve: Who negotiated the contract for you?
Tyler: A realtor.
Steve: That’s pretty smart.
Steve: Good for you, man.
Voice Over: They’re talking about everything you need to know about mortgages, home loans and more. Nobody knows mortgages like these two. Get ready because here’s Steve and Tyler.
Steve: Yo-yo-yo, it’s Steve and not Tyler. Colorado Springs Mortgage [laughs] We’re doing another episode without Tyler and I’m not letting him get on Facebook Live now because he’s making act, like claims that the show isn’t the same without Steve ‘N Tyler. If you’re listening to the show and you’re out there and you’ve listen to– we’ve done a lot of these episodes with Steve and Tyler and now it’s just Steve for a few episodes. Sound off, send us a message, go to getkoalified.com and go to social media, post our links and tell us what you think about Steve ‘N Tyler missing. I think I just play this less. “Tyler, are you awake? Wake up, Tyler.”
We’re also not broadcasting today at early six in the morning so it’s a little bit different, a little later. Luckily, we’ve got Tyler at the office closing some loans so if you’re listening to this right now, like I said, share it on social media, comment, check it out. What we’re talking about today, Colorado Springs mortgage home loans is how to get approved for construction loan. A lot of people don’t know what the difference is between– We have a lot of topics about construction loans and buying or building houses versus buying an existing house. Today, we’re just going to really focus on, “How do you get approve for construction loan?”
When you do a construction loan, this would as– if you listened to our previous podcast that we had, we talked about building a custom home versus building a house or buying a house from a builder who’s developing a neighborhood or an area, right? The only reason that you would– most to the time get your own construction loan is if you’re building a custom house. If you’re building according exactly to your plans and specs, you’re not going into a neighborhood where there’s a developer and a builder where they’ve got 15 different floor plans and they’ve let you pick from the floor plans and you get to pick your tile and your paint, all that stuff.
This is literally, “I’m having an architect design a house to my specs, exactly how I want it and then I’m going to get to a lender and get a construction loan so that my builder can build that house.” How do you get a construction loan? How do I get approved? It’s a lot of the same way. You got credit. You’ve got income. You’ve got asset. You’ve got all the stuff that you would have to go through to as we’ve talked about before of your basic items needed stuff. That you’re going to have tax returns and W2s and pay stubs proving to the lender that’s doing your construction loan that you, in fact, can afford do a construction loan.
Whether you’re building a 200,000 house or 400,000 house, really didn’t matter. What matters is that you’re income and credit and your assets and everything you’ve got are going to allow for that. What that qualification or koalification as we like to say is going to look a Colorado Springs Mortgage lot like you’re normal loan qualification. The difference is they’re approving you for a house or a loan amount on something that isn’t built yet. There are a couple of things that come to play here. First of all, the property that you wanting to build and for the price that you wanted to build it has to be within reasons.
What I mean by that is if you’re building, you put plans and specs together to build a $350,000 house, smack-dab in a lot and between a bunch of $110,000 houses. Your lender might have a problem with that because if something happens and you build this house and then you default on that construction loan, they’re going to have a house that’s over built for the area. It’s going to be harder to market, harder to sell. There’s all those things that go into it so your lender is not necessarily going to say, “Yes, sure. Build whatever you want, whenever you want, anytime you want.”
They want to make sure that the specs, the plans, the architecture, everything that Colorado Springs Mortgage you’re doing needs code, that it’s reasonable, that you’re not trying to build a house at $280 a square foot. When you’re never going to get out of it because the last thing your lender want is for you to have invested, they give you a construction loan for $350,000 and when the house is built, you’ve got a house worth 200 grand. That would really not be fun with. What you want to do is make sure that you’re getting with a reputable builder or general contractor that’s going to help you plan that, design it.
Maybe a realtor, if you got a realtor that can help you identify the land that you’re going to put it on. But you’ve got to be up front. You’ve got to be very diligent to make sure that the house you’re wanting to build in fact will work on where you wanted to build it and for the size you wanting to build and the cost, because things can Colorado Springs Mortgage happen when you’re doing a custom build. I think we talked about this in a previous podcast where we had a couple that hired a cement guy to put in a driveway and the guy was supposed to build a 10-foot driveway when he built a 20-foot driveway.
Well, they didn’t want their driveway to go all the way up to the road. It was their land that they owned. They just built double what they wanted, and guess what happened? He went over his construction cost. His lender did not approve that. It wasn’t in the plans of the house, and guess what he had to do? He had to come out of pocket for that expense which was double what he expected. When he thought he was spending $8,000 to put in driveway, he ended up spending 16,000 or 17,000 actually and the money is not in the loan in order to pay for that. They didn’t account for a 20-foot driveway.