Is an appraisal needed for a construction loan?
Category:
business and finance
real estate industry
An appraisal is an opinion given by a licensed appraiser on the value of a property. The appraisal is just as important as your income, credit and assets when you're applying for a construction loan. For new home construction, the appraisal is even more important than an appraisal for an existing home.
Also, is an appraisal requirements for new construction?
Your mortgage lender will require an appraisal of your new construction home before approving your loan to ensure the property is worth the amount of the loan it's contemplating extending to you.
Secondly, how does a construction loan appraisal work?
Property appraisals for use in conjunction with home construction loans are completed using a set of building plans, a specification list or spec list, the cost breakdown, a site inspection and plenty of research.
What Are The Requirements For A Construction Loan
- The Lender Needs Detailed Descriptions.
- A Qualified Builder.
- A Down Payment of Minimum 20%.
- Proof of Your Ability to Repay Loan.
- The Property Value Must Be Appraised.