I own my land already. Can I keep my land separate from the home purchase? ▲
No, your land will always be part of the collateral securing your loan. When a permanent home is built into your land, the land and home become one property. Thus, it is secured by one loan.
When you check my credit score, is it a “hard pull”, and will it negatively impact my credit? ▲
When we check your credit score it is considered a “hard pull”. During our credit check process, we obtain a score from each of the three bureaus: Transunion, Equifax, and Experian. We will use the middle score provided from the three bureaus as a key factor to determine your home loan qualifications. Your credit can be pulled by a mortgage company 3 times in 45 days without it impacting your score. Credit monitors see a credit pull from a mortgage lender as different than a credit pull from a credit card company.
What down payment is required? ▲
For VA loans, 0% down payment options are available. For FHA, as little as 3.5% down. For conventional loans, we require at least 5% down.
I was told that I can use my lot as my down payment. How does this work? ▲
If you own the lot already, your lot and home will be combined into one property. Each construction loan product has different guidelines pertaining to using lots as equity, but many programs allow you to use the equity in the land towards your down payment. An appraisal will be conducted to determine what the land value will be when the home you’ve designed is built on the lot and we will lend based on that value.
Do I have to pay off my land before we start building? ▲
No, an appraiser will visit the property, bringing along your specs and plans, to determine the value of your property once the planned home is built. You can then combine the loan for the land with your construction loan, bundling whatever is owed on the land into your home mortgage.
What is the minimum credit score required?▲
Minimum qualifying credit scores vary depending on the loan product. Conventional loans allow for credit scores as low as 620, while FHA and VA Loans allow for credit scores as low as 580. However, it is important to keep in mind that credit score is only one of many factors taken into consideration when you apply for a loan; meeting the credit score minimum does not automatically mean that you will qualify for that loan program.
How do construction loans work? ▲
This can vary by loan product, but typically, One-Time Close loan products consist of only a single loan which is funded prior to construction. The loan then converts into permanent financing after the construction period is complete. Two-Time Close loan products consist of two loans: a construction loan which is then refinanced into a permanent mortgage.
When should I get pre-qualified and how long does the process take? ▲
You should get pre-qualified ASAP! The process usually takes about 24-48 hours after the application is complete and your documentation is uploaded. We generally request the following documentation:
- Pay stubs: Most recent, covering the last 30-day period
- W-2’s and/or 1099’s: Most recent 2-year period
- Tax Returns: Most recent 2-year period (include personal and business if applicable)
- Bank statements: Most recent 2 months (all pages)
- Retirement/Investment Accounts: Most recent 2 months' statements or most recent quarterly (all pages)
- Copy Photo ID Property owners: For each property owned, your most recent mortgage statement, homeowner’s insurance declaration page, income taxes, and HOA statement