Obtaining the necessary funds for any new home construction project is generally not easy to do. Unless you have special qualities as a borrower, traditional lenders are less keen to release the funds for your construction.
This is one of the hurdles of buying and erecting kit homes — especially if you’re an owner-builder. This type of Prefab housing may be one of the most economical in the industry, but it’s, of course, still not that affordable enough for many to pay for it upfront.
While lenders are no genies to grant you the sum you wish to borrow without fuss, you can use these tips to increase your chances of getting approved:
Reduce the Risk
According to Grandesigns WA, you couldn’t change the fact that banks would always be conservative to loan money for building new kit homes in Perth, Western Australia, but you could lower the level of risk they have to take.
Apart from buying a piece of land in a hot market, you should save as much money as you could for your deposit. As you’d have to pay a down payment that’s worth 5% to 25% of the land and construction’s price, proving you have a large amount on your bank account could give more confidence to the lender.
Find a Lender That’s Willing to Work with You
Each lender has his or her own set of requirement, which you should meet. If you wish to tweak the procedure to suit your situation, it’s always best to find a willing lender than argue with a company that’s reluctant to go outside of their normal lending procedures.
Set Everything in Stone
When you apply for a home loan, make sure everything in your application is final. You’re allowed to make changes along the way, but doing so may cause the financial institution to reassess your application. This naturally slows down the process, and may even get you denied the second time.
Getting your kit home loan approved is harder than you think. Especially if you don’t fall into the safe category of lenders, you may have to go through the eye of the needle first.