| "> | | | | foreclosures abound, appraisals and values have, in |
| Getting a loan these days isn't easy. Finding one to | | | | many cases, plummeted. This translates to an overall |
| build a home is even harder. Even a burrowing mole in | | | | sentiment that real estate investments may not be |
| dark sunglasses can see this. It's certainly not a secret. | | | | predictable. Banks are super cautious these days. |
| This can be very discouraging if you want to build your | | | | Uncertainty is to a bank as a tornado is to a mobile |
| dream home right now. | | | | home park. If what you fear could happen does in fact |
| Despite the confusing economic climate and the | | | | happen, there's going to be a mess to clean up. And |
| narrowing choices, home building lenders do still exist. | | | | nobody wants another mess right now. |
| But, the requirements for approval have changed. | | | | Yet, there are banks willing to make home loans. And |
| Understanding What Banks Want | | | | there are banks willing to make new home |
| It's a bit difficult not to make disparaging remarks about | | | | construction loans. They just make you work harder to |
| banks right now. They certainly have contributed to | | | | prove yourself. |
| their own demise and are suffering from a poor | | | | Are You a Good Investment? |
| reputation. Yet, they still hold the cards if you're in the | | | | It all comes down to the investment. Are you worth |
| market for a loan, and logic demands that you set | | | | the risk? And if you are, is your project something they |
| aside emotion and study the requirements. | | | | can count on? They have ways to make sure, and |
| Simply put, banks want to earn a profit on the money | | | | these ways affect you. |
| they control with as little risk of losing that money as | | | | Banks are requiring more money down, more income, |
| possible. It's not their money. It's your money. It's your | | | | better credit ratings and more assurances that your |
| neighbor's money. It's your family members' money. So, | | | | home will support the value being projected for it. If |
| they must take care and invest it wisely. And, very | | | | you can assure them of all these things, it can work. |
| often, the banks must answer to the shareholders | | | | But, it's nothing like it was a couple years ago, if there's |
| concerning their management practices and their | | | | a question that goes unanswered, you're likely out of |
| profits in using this money. | | | | luck. |
| Where Does the Money Go? | | | | What You Can Do |
| Bank managers look for the safest investments | | | | Unfortunately, you have to play their game. If you can |
| possible. They are constantly on the lookout for | | | | fulfill the requirements right now, you're in good shape. |
| opportunities to increase profits, assets, and depositors. | | | | You can move forward with your project. On the |
| To make these profits and grow their business, they | | | | other hand, if you fall short, you'll have to wait. |
| cannot sit on the funds. They must invest them. | | | | Find out what they want. And go to work on fixing the |
| Without getting into stories of the greed that caused | | | | problems. You may need more time on your current |
| many to speculate on rapid gains and easy profits, we | | | | job. You may find that you have a credit issue to clear |
| understand that lenders must put the dollars they | | | | up. Your credit score may need to improve. Your debt |
| manage to work. Now, in this economic and mistrustful | | | | to income ratio may need to improve. Ask the bank |
| environment, they are extra careful where they invest | | | | exactly what factors contributed to any loan decline |
| those dollars. | | | | and go to work to fix them. |
| Is Real Estate a Good Investment? | | | | There's no real harm in waiting right now. But, make |
| Another obvious victim of the current economic | | | | the waiting productive. Improve your situation now and |
| debacle is real estate value. As home sales lag and | | | | you'll be sitting pretty before you know it. |