Church Mortgage

When it comes to building a church, a church mortgage is an essential part of the project. In order to pay for the building, you will need to secure funds from a banking institution of some sort. Not unlike a house, a church mortgage allows a new church family to grow and to expand or it allows an existing church family more room to breathe. But in order to ensure that the church is able to pay for the loan in the long term, some care must be taken as you secure a church mortgage.

Church Mortgage: How Much Can You Afford?

What you might not realize is that church mortgages are after much higher in price than traditional homes. Because the space is much greater and your needs for other facilities will also be more extensive, a church mortgage can be several times the price of homes in the surrounding areas. But just because other churches are larger and costly does not mean you can necessarily afford this sort of financial agreement. It will help if you begin by looking at the current debt your church has as well as the income per year. Since a church mortgage will typically be between three to three and a half times the yearly income, you might be looking at a loan of around $1 million. However, if you have debt, this means you will be shouldering even more debt if you take on this large of a loan.

You will want to thing about how much money you will be able to afford each month for the mortgage payment while still paying for others bills and while still paying for salaries and other necessarily expenses. If the monthly payment seems affordable, then this is a number you need to aim for. To determine this number, it can help to sit down with a bank first to see what kinds of interest rates they can offer you and what paying the loan back will cost the church.

Church Mortgage: How Can I Qualify?

Just because you are running a popular church does not mean you necessarily qualify for the money you need. You will want to have at least three years of history with the church itself to help show your legitimacy and a trend of consistent income. You will also want to make sure you can put 20% into the project with your church funds. If you can not meet these guidelines, there are alternative financial options – capital stewardship campaigns, for example. Or you might want to look to parishioners to help with the building costs as well.

Having a good credit history is also essential when you are applying for a church mortgage, just as it would be essential if you were applying for a home loan. Make sure your credit report is free of errors and issues long before you walk into a bank.

Church Mortgage: What Do I Need to Do?

When you are getting ready to look into a church mortgage, you will want to consult a church building consultant or a church loan broker. Not only can they help to walk you through the loan process, but they can also help you with filling out the numerous forms and applications which will be required.

To help out, you will want to make sure your church's financial papers are in order and that you have provided all of the necessary information to the bank or other lending facility. This way, you can show that you are a good loan candidate who is ready to take on the responsibility of paying for the construction of your new house of worship.