Owner builder finance: Unusual situations options
It’s important for tradesmen, homeowners, and home-buyers to understand that owner builder finance loans come in a variety of versatile options to meet the needs of almost every owner builder. There are some things you should know about these loans and qualifying for owner builder loans. The following will cover these factors.
Owner builder finance: What amount can be borrowed?
Each loan case is different, which means the lender goes on a case-by-case basis in determining how much a builder can borrow. Some of the common options include the following:
Can you qualify?
Some of the questions you will find that relate to helping you find out if you qualify for a home builder loan include the following?
- Are you a licensed builder?
- Can you provide proof of your income?
- What is the land value?
- What do you owe on the property?
- How many structures are on the land?
- What is the cost of construction?
- What is the estimated value of the property after the construction is complete?
Owner builder finance: Types of loans
Low-doc loans – Low-doc loans aren’t just for self-employed property owners, but also for licensed builders. You may be able to finance up to four dwellings with a maximum amount of $1,500,000 without providing evidence of your income. This option may not apply to you. Only a qualified owner builder finance mortgage broker can help you determine the best solution.
Small developments – Developers often start and complete small projects. This situation is for builders with a lower track record of projects. This is a good place to start when you want to venture into larger projects. Some of the lenders will allow you to obtain a loan without proof of income if you are planning to sell the properties after they are completed. It’s not unusual to obtain 70 to 80 financing.
Guarantor loans – Just like the average person planning to buy a home, a builder can also find a partner, family member, or friend to guarantee their loan. This can help you get between 80 to 90 percent financing.
Partially completed homes – This kind of problem occurs with builders who start a project and get it partially completed. Most lenders will not loan money for partially complete homes. However, there are situations where some lenders will provide you with between 60 and 80 percent of the total cost for owner builder finance.
Owner builder finance: How do you know if you are eligible for a loan?
The best way to be sure you can get a loan is to know you have proof of a regular income and good credit. Optionally, you may find lenders who deal in alternative ways to finance your projects. The only way to find out if you qualify for owner builder finance loans is to speak with a professional mortgage broker about your situation.
If you do need a good mortgage broker to help you with owner builder finance, try contacting a mortgage broker from our Tradebusters Academy network. These mortgage brokers specialise in helping tradesmen in business and we sure one could be a good choice for you.