Financing in Portland>Question Details

Ty K, Home Owner in Portland, OR

Can I qualify for a construction loan on a second home with a 720 credit score, 45% DTI, 60% LTV, and 6 months reserves on new payment?

Asked by Ty K, Portland, OR Mon Jan 17, 2011

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Shelley Reese’s answer
Yes, there are Lenders available. However, there are several questions...

How far away from the 2nd home is your primary residence? Is the 40% down + closing expenses your own money? Savings, 401K , etc. ? Are you comfortable with a 45% debt to income ratio and why?

AND other standard qualifications....time on job, full documentation on all ..
1 vote Thank Flag Link Mon Jan 17, 2011
You have some great numbers but, as Marge said, this is a different lending world then what we have seen in years past. I would suggest that you talk to a Credit Union, in particular, a locally owned Credit Union. They have different lending restrictions than banks and in situations like yours can be life savers because they look at each person individually and often have local underwriters.
1 vote Thank Flag Link Mon Jan 17, 2011
Your best bet is to talk with a lender to find out for sure - everything you show above sounds great and easy enough to do but there are few lenders right now that are willing to even do a construction loan. Good luck!
0 votes Thank Flag Link Tue Jan 18, 2011
Ty, This sounds like a great deal. Too bad that I am not licensed in Idaho. I do, however, have an Aunt that runs the Private banking mortgage division of Wells Fargo and is based in Boise. If you're interesed I can get you her information.
0 votes Thank Flag Link Mon Jan 17, 2011
Ty I am not licensed to do a loan in Idaho but I would be happy to steer you in the right direction for the construction loan. Drop me a line.
0 votes Thank Flag Link Mon Jan 17, 2011

The LTV is 60% because I own the land, and the constructed home will cost approximately half of what it will be worth in the location it is in. The home would be in North Idaho, and I live in Portland.

I make approximately $110K, and will have no other debt at the time of construction, so I am personally very comfortable with the 45% DTI.

0 votes Thank Flag Link Mon Jan 17, 2011
The basic parameters are there however there is much more being required these days for a clean approval. Job time, income type, what kind of funds make up the reserves... the list goes on. There limited options for construction loans but I would be happy to help answer any other questions.
0 votes Thank Flag Link Mon Jan 17, 2011
Hi Ty,
Your info looks good but in today's credit market you need to talk to a lender to get a full picture. The guidelines vary by the type of loan you're getting, and will be different for a construction loan as well. Its alot more complicated, in today's world, when its a second home.

It doesn't take much to talk with a lender to get an idea. Just get a referral from a friend, or you're welcome to contact me via email and I can give you some recommendations.
Best to you,
0 votes Thank Flag Link Mon Jan 17, 2011
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