Do Banks Finance Barndominiums?
“Barndominiums” offer affordable, low-maintenance and easily customizable alternatives to traditional homes, but if you’re in the market for one, you may wonder whether you can also get a loan for it through traditional means. Many people shopping for barndominiums, or steel homes that often combine living space with another type of usable space, have questions about whether a bank or credit union may offer them financing for their projects.
So, is it possible to get a loan for a barndominium through a bank or credit union, and if so, what might boost your chances of getting one?
Bank and Credit Union Loans
It is indeed possible to get financing for your steel home project through a bank or credit union. Many people find that they have an easier time obtaining a loan through the institution where they already bank, because they have an existing history there.
If you explore several different loan opportunities in your quest for financing, you may also find that your existing bank offers you the most favorable loan terms and interest rates, although this is not an absolute. However, your ability to get a loan from any bank or credit union may depend on several important factors.
Improving Your Odds
When you request a loan for a barndominium from your bank or credit union, know that your odds of getting it improve when you have three important things.
- Strong credit
- Building plans
- Contractor bids
Any funding source is more likely to extend you credit when it trusts you will pay back everything you owe in full. Your credit score is a good indication of how likely you are to do so. The higher your credit score, the better your chances of not only getting a loan, but getting one with favorable terms.
Having comprehensive information and documentation about your project and plans may also increase your chances of landing the loan. When you approach your bank to request it, bring along any building plans or contractor bids you have to show that you’ve done your due diligence and are ready to move forward with your project.