Top Tips in Financing A Modular Home
How does one become calm in financing a modular home? Modular homes are less expensive but it can be overwhelming to finance. Most homeowners would apply for home loans in the bank to get started with the construction of their homes. But what are the steps that a homeowner should undergo when financing a modular home?
Types of Modular Home Loans
In a financing modular home, a person will undergo two stages when the bank has issued the loan. These are commonly called as construction-to-permanent loans. When your home is complete and has received the final appraisal, the loan is called construction loan. This is where you pay for the ‘interest’ of your loan. And if your home is complete your loan is called permanent mortgage, which requires you to make regular payments.
Steps To Financing A Modular Home
There are 8 steps in financing a modular home. The first step is to undergo a non- binding pre- qualification estimate. This is where you figure out how much money you will spend for your home and how much will they be able to lend you. This will be successfully done if you will show the bank your financial information and your credit history. Second is to compare rates from at least three different banks. This is to ensure that you will get your money’s worth for the loan. There are banks that offer low interest rates which could save you thousands of dollars for a home loan. The third step in financing a modular home is to apply for the loan. You will need to prepare a number of documents before this. With your satisfactory application, the bank will most likely approve your loan. A letter of commitment will be sent to you once this happened, and you may present this to your manufacturer or dealer before signing the final contract.
The fifth step is simple yet maybe tedious for some homeowners. Once you’ve received the approval, you will need to set- up a disbursement schedule showing your payments for the property, your manufacturer, the general contractor and anyone associated with the construction of your home. The bank will ask for a proof of completion of the disbursement from you during an inspection. If this was done accordingly, the bank will release the payment. After this, you and the bank will close on the loan. Together you will sign the final documents and you will pay for the closing costs. Your loan has been approved and closed. Your modular home is now being built. And you are paying every month to the bank for the interest. Until your home is not complete, you will not pay for the principal. You will only pay for the principal when your home is complete and the bank has already done the inspection and appraisal of your home. If bank is satisfied, your loan will become permanent mortgage and you will start making payments for the interest and the principal. You will pay higher every month with this one.
The steps for financing a modular home may be simple but as I have said it could be daunting. Honest documents will play significant role in your loan application. So make sure that these documents are legal and valid. Moreover, pay attention to the details of your loan. Read between the lines for hidden fees and charges for late payments because this is where most of the homeowners fail.
Financing a Modular Home Loan
Legendary Homes, Inc. is among the top ranked home builder who is working with the Specialty Products Group of Premier Home Mortgage in financing the construction of your dream home. You can go to the financing page of Legendary Homes for a free, personalized consultation.
“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 home financing by working with the top lenders in Michigan.”
It’s amazing news to start building your dream home, right? “We make your dreams a reality!”
