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Construction Loan

Mortgage Library: Ask a Mortgage Related Question: Answers: Construction Loan

Question:

My husband and I are in a position to buy 2 lots of property fairly cheap. The first property we are renting a house on (from my husbands parents) and the second has a house being rented. We are interested in buying both houses and also building a house on the 2nd houses extra property. We would like to maintain both current houses to rent as a source of income. Our problem is that due to our current career position we have high debt to income ratio.

My question is would the equity in the houses and the rent we could obtain be enough to qualify for a construction loan? I understand you probably need numbers to give me a good answer, but I guess I am kind of looking for information on how the rental situation/other property ownership could positively affect our ability to qualify for a construction loan.

C.

Empoirum
Pennsylvania

Answer:

It is possible to use the equity in your existing properties and the rental income to help qualify for a construction loan. As you probably already know, construction loans are a little tougher to qualify for than a loan for an existing home. Debt ratio is a big factor, also important are your credit scores and liquid assets.

Simply owning the other homes won't necessarily help or hinder your approval for a construction loan.

I hope this info helps. If you'd like more info or would like to see if you qualify for the home you'd like to build, please call me. Thanks!

Rick Lanicek
PrimeLending, A PlainsCapital Company
17950 Preston Rd Ste 50
Dallas, TX 75252-5759
(972) 705-9721
(800) 256-0817 Ext 202
Mobile (214) 552-6125
eFax (972) 692-7260


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