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Financing Ideas For Your New Modular Home or Addition
Modular Homes financing is available these days even though many banks have backed away from home construction and they have shied away from any type of construction, investor, and/or any home loan that is not a final “permanent” loan due mainly due to the high rate of foreclosure these days and other disparaging reasons. If they do offer a “construction” loan, many banks require at least a 20% down payment or your land in lieu with some fees for closing costs normally with cash or savings. To add, credit scores, job situation, and credit worthiness are factors that greatly affect your ability to obtain a “construction” loan with typically has more stringent guidelines for approval and funding than a standard “permanent” loan. Some good news in our research revealed a few banks or home lending institutions only require 5% down payments and a little less stringency on credit. Further, FHA has a program whereby one only needs 3.5% plus a portion of the closing costs if the builder pays a portion of closing costs as well. We can provide some contacts for some of these contacts, just email: email@example.com and all we ask is for some feedback and “word of mouth” promotion of our site with your colleagues! Eventually we will have a tab for financial institutions to represent there contact information on our site www.modulars.com.
According to the Modular Building Systems Council, there “is no distinction between modular and site built construction as far as appraisal and financing”. In fact, common sense reveals that modular homes are less risky for the banks because the TIME to complete construction is drastically reduced as compared to stick built construction. For the consumer, interest payments cost less for the same reason. There are some differences in the “draw” schedule (disbursement of funds by the lending institution) between modular and stick built because the factories normally pay for the majority of the materials up front, whereby a builder normally has to collect your funds before they go purchase building materials and this is an additional risk with stick building- more than one builder has taken the cash and ran! This scenario is far less likely and less risky building modular because the factories have physical, long standing, fiscally responsible positions and they only require a partial deposit on the balance of the home to begin construction. Once the home is built, there is another draw to pay off the balance of home, and further draws cover final utility hookups, decks, HVAC, and other final finishing costs. This is all additional good news for the future modular home owner.
Surprisingly or not, some builders have even offered their own construction private loans to expedite the process due to the banks disparaging policies these days. All you need is final approval on the permanent loan and these builders fund the construction part- feel lucky if you connect with one of these builders- They can save a lot of time and stress.
Obtaining construction financing is one of the most important aspects in the beginning stages of your modular home building project. You will get better customer service from builders if they know you are ready to go with financing. It is just human nature for builders not to jump up and down for you if you haven’t even tried to get the loan- these loans can take months to finalize, builders know this, and many will kindly put you off knowing it takes months these days and you are not doing your part as a future client. So attack this situation and obtain your construction loan approval ASAP and you will have more success getting pricing and service from our builders. Attaining the loan also sets your budget. So if you know you are going to build in the near future, one of the first steps you have to take is obtaining this loan so you will have hurdled one of the main obstacles in your path to modular home ownership!
Again, send us an email: firstname.lastname@example.org and we can help you locate some of the lending institutions that specialize in modular construction or for any other pertinent requests.