Preparing for Construction Financing

If you are thinking of investing in the real estate sector, then understanding your options for financing your projects is crucial to your success. Let’s explore some of these options when you are getting into an investment or home that needs a considerate amount of repairs to bring it to its actual market value.

Construction financing is an option found bringing two loans into one. This is especially found when constructing your own home. The lender looks at your current conditions and bases your LTV (Loan To Value) on the ARV (After Repair Value). Giving you access to equity of your home to make repairs without having to do two loans.

Traditional lending institutions are twice likely to finance commercial construction to residential homes. When looking for builder financing, you should first look at your credit reports. Most financiers will have an interest in your credit history. If you have a history of bad credit, finding a suitable financing program may be difficult for you. Times have changed however, and the market is saturated with investors that have the equity, but lost their credit rating during the downturn of the economy.

This is a good time to learn more about your options. Make sure you gather appropriate information before you start looking for developer financing partners. You need to know the available financing options in the market. If you cannot work with a traditional lending institution for instance, because of one or many reasons, you need to know whether there are other options that you can use.

Peer to Peer lending is one of the most viable options that you can use for your construction financing alternative. With social lending, you can easily borrow money directly from an individual without using intermediaries. P2P lending provides you with more flexibility to help you get back on your feet and into a more traditional lending platform.

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