Understanding the Modular Home Financing: Options and Decision Making
Modular home financing is fast becoming an alternative choice for buyers. It was found that five to ten percent of all houses in the United States are modular houses. Manufacturers of this type of dwelling give their utmost service to provide assistance to home buyers in the entire duration of the construction process. And one of the services they provide is guidance in modular home financing.
It is substantial for the home buyer to be familiar with all aspects of modular home financing before seeking a mortgage provider. This will help during the decision process on who to get to when applying for the loan.
Choosing the Modular Home
Two Story Modular Home by Legendary Homes
Understanding what is a modular home before discussing what modular home financing is may be the best start. Modular homes are a type of house that comprises of sections, which are constructed in an indoor and controlled environment. Once the sections are completed, they are transported to the site, and later assembled and glued by the general contractor and his team.
There are several advantages for a person when deciding to purchase a modular home. One of the honest benefits of this type of house is that it takes lesser time to construct as it is built-in a controlled factory where delays are prevented. Modular homes are inexpensive compared to the conventional house. They are further seen to have a higher resale value. Superior quality and energy efficiency are also included in the benefits of a modular home, leaving the home owner a comfortable and safe abode. Moreover, one of the important benefits for buyers in buying a modular home is that the reduced cost overruns since prefab homes come with a guaranteed price.
When seeking modular home financing, a borrower is supposed to be wise. He must conduct extensive research in securing a construction- to- permanent loan since this is a special type of housing.
Types of Modular Home Financing
Conventional Loan
Whether a person obtains modular home financing, a traditional mortgage for an existing residence or funding for constructing a site built house is part of the option. This type of financing requires an individual to have a good credit record, and those who have sold their houses in a short sale period. It is also provided for persons who have been in bankruptcy, provided they have been discharged from it for at least 3 years and have established a good credit record since then.
Construction Loan
Generally speaking, options for modular home financing are almost the same with the conventional houses. One of financing options is the construction loan. When an individual do not have the means to build a home without the use of credit, he can apply for a construction loan. Usually a construction loan is considered a line of credit by most lenders, and is more costly than the mortgage of an existing house. It helps a buyer in paying for the work made by subcontractors, some permits and fees, and the construction process itself. Architectural plans or site testing are not necessarily included in a construction loan when it covers the anticipated costs of building a modular home.
The wise decision for an individual when considering a modular home financing would be to diligently have a trusted lender who as much as possible provides the utmost service to fund the construction. If the chosen option is not satisfactory, then a home buyer should invest much time in choosing a trusted modular home builder or dealer who works with an excellent loan provider.
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