Construction Loan Brokers and Lenders

If you are getting confused trying to decide which construction loan is best for you, or you are having trouble finding a good fit with lenders, you may wish to consult with a construction loan broker.  As with any other loan, a construction loan broker is an agent who analyzes your financial situation and unique needs, finds the best possible loan options and helps negotiate with lenders on your behalf. 

Construction loan brokers have a background in both aspects of a construction loan, such as the financial side, and the construction side.  On the one hand, a broker understands the financial industry and its needs, such as how a borrower’s credit score affects a loan application, how to negotiate with a lender and how to alleviate a lender’s concerns about risk.  On the other hand, a broker also understands the construction industry, such as zoning regulations, building code requirements, materials costs, and other necessary expenses.  A construction loan broker is uniquely trained to find a loan that satisfies your needs and your lenders’ needs. 

Your First Meeting

Even though a construction loan broker understands the lenders’ needs, your broker is first and foremost working for you.  Your broker needs to have as clear an idea as possible of your plans and of your financial situation before he or she begins finding the best lender for you.  Before you call your broker, spend some time first developing a detailed construction plan. Be as specific and thorough as you can.  Also, gather as much information as you can about your personal finances.  During your first meeting, your broker will discuss loan options that best fit your project.  The broker may even be able to suggest a few project changes that can help alleviate costs.

Finding Your Lender 

Once you and your broker have agreed on a plan, the broker begins to consult with lenders.  Most brokers have ongoing relationships with a number of lenders in your area and will speak to many different lenders, before deciding which lender would be the best fit for you and your construction project.  If your broker has an especially good relationshp with a given lender, that lender may be more receptive to your proposal and may offer a better interest rate.

A construction loan broker is especially helpful if your project presents a very high risk situation.  If you have imperfect credit, or if your project is especially complicated or expensive, a traditional lender may be reluctant to deal with you.  A loan broker can help negotiate a difficult loan or high risk project.