I am thinking of applying for business loan to build custom home. They ask for 3.5% interest, is that high or reasonable?
I need investment to build custom home, then sell to make profit, it will take at least two years to build, until the house sold, during this time, how do I pay back the loan? What is reasonable arrangement?
*Yes, you can get a business loan to build a house, but it depends on your situation and the lender's requirements. Here are some points to consider:
- *Business purpose:* You'll need to demonstrate a legitimate business purpose for building the house, such as rental income or using it as a home office.
- *Down payment:* Be prepared to make a significant down payment (20-30%).
- *Credit score:* A good credit score (700+) is crucial.
- *Collateral:* The lender may require collateral, such as the property itself or other assets.
- *Loan options:* Consider a construction loan, commercial loan, or alternative lenders.
- *Interest rates:* Be prepared for higher interest rates compared to traditional mortgages.
- *Repayment terms:* Understand the repayment terms, including the loan term and monthly payments.
*Additional tips:*
- Consult with a financial advisor or accountant to ensure you're making an informed decision.
- Research and compare lenders to find the best option for your situation.
- Consider alternative funding options, such as private money lenders or partner investors.
Remember to carefully evaluate your financial situation and the loan terms before making a decision. Good luck with your home building project!
Depending on: The state you live in, the type of loan you have applied for, and weather you've applied with a personal or a business bank account that interest is pretty good as you would typically see up to 8-12% (even with great credit) anywhere. Check the the Federal Housing Administration Loan Cap in Your Market by googling that + "state + county".
