Modular Home Mortgage: One Time Close vs. Two Time Close
Most first time home buyers find modular home mortgage confusing. It is considered as one of the difficult topic to understand when you are planning to finance the construction of a home with a loan. And as such some home buyers think that it is daunting to successfully have this type of mortgage.
To depreciate the dilemma of modular home mortgage, it is customary to decipher the basics of a modular home mortgage.
Basics of Modular Home Mortgage
There are two stages of modular home financing. The first stage is the construction to permanent loan or the construction perm. It is where the bank or lending institution, who approved the loan, will pay the builder and the manufacturer. Payment is made every after each stage of the construction is done properly. Once the modular home is complete the loan will be converted into mortgage, which is usually a 15 to 30 year fixed rate loan.
Now it is time to know and understand the two types of modular home construction loan.
One Time Close Loan
One Time Close Loan is the most convenient way to finance the building of a new modular home. In this type of construction loan, the loan does automatically change into the permanent loan at the end of the construction. It only has one set of closing costs and fees which will give you bigger savings. A home buyer is only required to be appraised once and his credit will be pulled once at the start of the loan process.
One Time Closing Loan is discussed and settled before the commencement of the construction, which allow the home owner and the lender to lock in the restrictions and regulations of the mortgage. This type of construction loan protects the home owner when changes in interest rates and loan terms occur.
Two Time Close Loan
The Two Time Close Loan differs from One Time Close Loan largely because it does not automatically convert the construction loan to permanent loan when the modular home is completely done. A home owner only needs a separate end loan like he is buying a new home.
Two Time Close Loan is also applied and approved prior to the initiation of the construction. Additional fees are expected in this type since you will be appraised twice. But under some bright circumstances, Two Time Close Loan may be an excellent choice since most of the government loan programs are not available for construction financing.
The basics about modular home mortgage are now given. It is now your decision to take another step further to build your dream home. We recommend that you call Legendary Homes, Inc. to start realizing your dream home.
“With its superior quality, energy efficiency, strong and budget friendly modular homes, Legendary Homes is one of the trusted modular home builders around Clarklake and Jackson Michigan for over 20 years of experience now. Legendary Homes helps in site location, acquisition of permits, excavation, foundation (including Insulated Pre-Cast Foundations), landscaping, breeze ways and other services needed to complete your home. As a company that prioritizes its customers, Legendary Homes allows you to customize your home. And most importantly, we assist in modular homes financing by working with the top lenders in Michigan.”
It’s amazing news to start building your dream home, right? “We can make your dreams a reality!”
