Steps to a Successful Construction Loan for Modular Home
How does one have a construction loan for his modular home? What are the requirements needed to apply for it? What are the steps in a modular home financing?
Home ownership is one of the big decisions a person could make in his life. But paying cash for the construction of your home is overwhelming especially if you are only making minimum monthly wage. Luckily, there are institutions that assists in modular home financing, which could make your dream home become a reality.
To understand how to get a construction loan for a modular home you are dreaming about, you need to know its steps.
Pre- Qualifying Estimate
A modular home loan pre- qualifying stage is a quick process which gives you how much you will be paying and how capable are you to pay. Your budget and your financial history income will be asked in this step of home financing. This does not assure a specific amount for your mortgage. But honest documents and answers guarantee that a pre- qualified estimate is accurate.
Applying for a Construction Loan
The formal application for the construction loan requires check for fees, proposed contract of a modular home plan, recent bank statement, current invoice from employer, and loan statements if you had acquired one prior to applying. It will take days for the bank to verify the information you provided, but it will be faster if you apply to a bank or lenders specializing in modular home loans.
Mortgage Approval
After the thorough evaluation of your application, the bank will issue a formal commitmment letter which states the specific amount of loan they will provide for the construction of your home. The letter also provides restrictions and conditions you need to follow before closing the loan and starting the construction of your home. Specific blueprint or floor plan of your modular home, deed of your building site and the contract with your general contractor will be asked to give the labor costs.
Disbursement Schedule
The approval of the construction loan then lead you to have a disbursement schedule which explains when and how much money will go to each vendor. The payments covers each milestone in the modular home construction, and inspection will be done every after the stages of the building process is completed satisfactorily. The bank will issue a check to you that you will pay to your general contractor.
Mortgage Closing
The loan is closed or settled once the disbursement schedule has been agreed and the bank has given all the conditions and restrictions. This stage is where the final documents of your modular home loan, you will pay closing fees or downpayments and other costs. The closing fees are not the last payment you will be paying in a home loan. More payments will be done when a construction loan is converted into mortgage.
Building the Modular Home
The initiation of your modular home construction is realized when a home owner and the bank have formally agreed and signed the legal loan documents. This stage is also the time where you give scheduled payments that are stated in the disbursement schedule as the construction progresses with each stage. Payments are based on what is stated in the disbursement, which will increase especially when the modules arrive in the project site.
Conversion of Construction Loan to Mortgage
Construction loan will be converted to a mortgage after the construction of your modular home is complete. Transfer fees will need to be paid in this stage. This is also the time when your home is appraised to make sure superior quality of home, all work has been accurately, and no liens are made by the manufacturer.
After these daunting yet beautiful experiences in home building, you now have a high performance and energy sufficient modular home. You are now sitting in your living thinking about what other beautifications will be good to your home. So what about having a good landscape design?
“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!”
