Construction Loan

Baton Rouge area. South of where you are.

I am also in the market soon. Any help in whether I should be looking into a broker or a bank for financing would be a great help. I have heard that loans can be tricky. Let's keep the thread going!

In my case a general contractor would be doing the work.

If you are using a general see if they will carry the construction loan - most in my area do so they have better control over the draws.

If you are acting as your own GC be prepared to be asked for 25% plus down up front. The rules around construction loans have really gotten tight over the last several months.

Also, if you are acting as your own GC, be prepared to show a lot of experience in construction because otherwise you most likely are not getting the loan.

I am in the process of trying to build right now and have been slapped down a bunch and I have a construction background and decent credit with 100% LTV financing on the end loan through the VA and I am still hearing no a lot. I also and hearing 20% plus down a lot.

Not saying it is going to be impossible, but it won't be easy.

you dont have to have "money down" per se. what they typically do is give you 80% of the appraised value of the home you plan to build. you'll need to have a set of house plans and possibly a plat of your lot or some information on it in order for them to do this. lenders like to see that you have a nice bit of cash in case you cant complete the house with that 80%. also, you may need cash to pay subs in between draws. if things are done right though, you can probably build your house without ever having to spend a dime of your own cash. the big kicker is to get a good appraisal. if they low ball you you may not have enough to build without cash. also, if it is an expensive lot, you may have to build a bigger house so that your lot cost doesnt take up too much of that 80%

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Construction Loan
What if your lot is paid for? I have a lot that I paid $32K for last year, Would that be good to put up for the rest of a loan for less than $200K?

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I will be using a contractor. Is it easier and simplier to get a loan if you use a mortgage broker?

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might want to check with the contractor on who he has done business with in the past. might make the process easier.

for anyone doing it themselves, you'll need to foot the bill for permits, get a bond, builders risk policy and all that kind of stuff (or I did), so you will need to have at least some sort of disposable cash on hand before you break ground.

Too much to type, but you can shoot me an E-Mail

Thinking about doing this too. Iberia Bank seems to give construction loans too. I’m also looking for contractors to get bids on remodeling that work in the garden distric area here in BR and have experience with older homes if anybody has any recommendations?