When financing modular home construction, you will need to learn what is its magic. Many have been looking for the benefits of modular financing but only a few understands the process. Others also have difficulty distinguishing modular home financing from stick- built financing. So to assist you in deciphering what is modular financing, here are the summary of the financing process and its  features;

Modular Home Financing Process

During the modular construction phase, you will typically be paying interest only on the money that you have used thus far in the process.  As work is progresses, more money is paid out and your payments will increase accordingly.  When modular home construction is completed and you have obtained your certificate of occupancy, the loan would then be converted into a permanent mortgage with principal and interest payment. In addition to these modular home financing options, some lenders offer the choice to also convert the land purchase loan into the mortgage with the construction loan.  That way one bank finances it all.  Most lenders allow a time period of up to one year to complete the modular home construction.

Difference Modular Home Construction Loan and Traditional Home Loan

The major difference between a regular construction loan and a modular home construction loans is the disbursement or schedule.  These are pre-arranged scheduled payments paid to your contractor and/or dealer as specific portions of work are completed.  In modular home construction, you will have two draws that will be significantly different than with stick built construction.  These will be your deposit for the modular home, and the payment upon delivery of the modules.  The cash- on- deposit payment required by the modular home manufacturer at delivery once caused a snag with the lenders.  Lenders did not want to pay until the modular home was on the foundation and inspected, but the manufacturer wanted to be paid before the house was set on the foundation.  This has been worked out with most lenders and they have measures in place to make this work for both sides.  Still, it is a good idea to make sure your lender is familiar with construction loans to avoid any issues around this payment.

In case you still have question about modular homes, you may contact Legendary Homes Inc in Jackson, Michigan. A representative will be happy to assist you. Meanwhile you can check our modular home price sheets by signing up to our blog

Topic: Modular Home Financing

Modular home construction needs to be funded. But what are the resources you need to check to execute the building process of your modular home?

Basically, there are three resources for consumers who wanted to build a modular home. These resources for modular construction are the private funds, lending institution, and the general contractor or dealer loan.

Private Funds of Modular Home Buyer

If you are fortunate enough to have access to enough private funds to build your own modular home, you probably won’t be reading this page.  However, you may not know that you can use the equity in your current home to build a new home.  If you are already a homeowner, and you have enough equity in your current home, you may be able to take out a home equity loan to pay for the construction of your home.

Lending Institution for Modular Home Construction

You may borrow directly from a lending institution, which specializes in modular home construction.  Lenders provide loans, for modular home construction, that are very similar to conventional stick built home construction loans.  There are a few options for how to best deal with your personal circumstances.  You may want to get a loan to purchase the land only.  This would be useful if you are using other sources to build your home, but need money for the land.  You may just want to buy the land, and then take some time to decide on how you want to proceed with construction and/or save for construction.  If you need to finance the construction, you will need a construction loan, and then you will need a mortgage, once the modular home is complete.

General Contractor/ Modular Home Dealer Construction Loan

The general contractor or modular home dealer loan is a loan for the construction of the home.  The modular home dealer is more likely to finance the loan if he is the contractor, and especially if he owns the land on which the home will be set.  This would make it easier to take possession of the modular home should you be unable to pay for it.  Once the construction is completed, you would need to obtain a mortgage. This would be a more conventional purchase.  The lender would pay off the construction loan and issue you a mortgage, as with any other home purchase.

In case you still have question about modular homes, you may contact Legendary Homes Inc in Jackson, Michigan. A representative will be happy to assist you. Meanwhile you can check our modular home price sheets by signing up to our blog

Topic: Modular Home Financing