Church Construction Loan

While you might feel as though your church's foundation is strong, in time, the actual building in which you house your church will need some support and possible a replacement. With a church construction loan, you can begin to not only provide for a secure future for your parish, but you will also allow for expansion and growth in your community.

Church Construction Loan: The Differences from a Home Loan

However, while a church construction loan is very similar to a house mortgage, there are differences that you need to keep in mind. First of a church construction loan is something that is meant to create a particular building for a particular purpose. As a result, this building will not be used for anything else. Thus, lenders can be more hesitant to help prospective church construction loan applicants as they fear the church will not be financial sound and the lender will be stuck with a building they can not sell. There is also some concern among lenders that the very long building process can hinder the loan repayment process as well. Though it's not impossible to get a church construction loan, these are things to keep in mind when you run into trouble.

Benefits of a Church Construction Loan

But just because you might have some troubles with the church construction loan process doesn't mean you shouldn't attempt to secure loans for your church building project. There are a number of benefits to getting a church construction loan.

There are a number of benefits that make the church construction loan process all the more attractive to parishes of all shapes and sizes and denominations.

Church Construction Loan: Rules to Keep in Mind

As with any financial agreement, there are rules to keep in mind when it comes to a church construction loan. First of all, you will want to make sure the loan amount you are applying for is enough to cover the costs of building, but no more. This will allow you the chance to know exactly what you will need to pay each month, while also helping you to control the costs associated with building. Before you can determine this, you will also want to make sure you are checking to see how much money you can afford before you ask for a loan. It's recommended that churches invest 20% of the cost themselves so that the bank is not footing the entire bill and so that the bank can see the church is also invested in this process.

Churches will also want to have a clean credit history before they begin the church construction loan process. In doing so, they will show they are responsible enough to pay the money back as promised. Another rule you will want to follow is to make sure you have up to date financial records easily available to the lending institution. This way, you will be able to show that the church has been making money for at least three years in a row, making you a favorable recipient of a loan.

Church Construction Loan: Tips to Make Things Easier

Just as with any large financial arrangement, things can become tricky as you are entering the church construction loan process. But with these tips, you can make sure things move as smoothly as possible.