Once you have been pre-approved, the following are some of the things you will need to do and take to the bank to get a home building loan:

Your completed loan application
Your loan officer will want to see your complete loan application first, which he will then analyze to determine whether you qualify. Some things you should be prepared to provide for your loan application include:

• The type of loan you want (new construction, in this case)


• How much money you will need (this is where preapproval comes in handy)


• Your current address and whether you rent or own your home


• Employer(s) and current gross salary


• Current bank statements


• A list of your assets


• A list of your liabilities (this includes your bills a

Once your loan officer has this information, he or she will determine how much money you can afford to borrow through a ratio known as debt to income, which is the percentage of monthly debt payments (including the new builder loan you are applying for) you can afford based on your income. This will typically be from 36-45%.

Insurance
Getting a home building loan is a little different from a traditional mortgage because it requires you to have two different types of insurance before you begin building. After you have been approved for your loan, you will need to provide proof that you have coverage of the following types of insurance:

• Course of Construction Insurance. This type of insurance covers all risk that could occur on the set of a home site and should include fire, builder's risk, replacement cost, vandalism, malicious mischief, and extended coverage.


• General Liability Insurance. Your builder may provide this policy, but ask upfront to make sure. Some do not want to pay for it, which means you will have to. The minimum amount required is $300,000 for each occurrence. If the builder is providing it, however, the amount is raised to $1,000,000. The easiest and most cost-effective thing for you to do would be to find a builder

A good thing to mention before signing contracts with the bank or lender is the importance of shopping around and making sure you have a reputable lender. Because new home construction sales have dropped significantly, there is a good chance you can find a better interest rate elsewhere.

Getting a home building home requires you to be prepared with a number of different forms, information, and documents. The above will give you a good idea of what you need to take to the bank to get a home building loan.