Magnificently Built Modular Homes
If your dream is to build a modular home on your land, you may be wondering what kind of mortgage you will need to achieve it. In this case a modular home loan is different from a typical mortgage. The most common mortgage for people building a new home on their land is a Construction to Mortgage loan, or Construction to Permanent loan. As the name implies, the loan starts out as a construction loan until the modular home has been placed on your land and it has been completed and inspected. At this point, the loan can be converted into a more traditional mortgage.
When looking for a lender for a modular home loan it is advisable to find an agent that has some experience in this type of mortgage. For one thing, there are still some lenders that are unclear on the difference between a modular home, manufactured home, or mobile home. Overall, many more agents have become aware of the difference and even point out to their peers that they have worked with modular homes and have found many to be superior to stick built homes. So even if you do run across a lender that is not familiar with modular home loans you should not be discouraged. There are plenty of qualified lenders that are very knowledgeable and would love to have your business.
One unique thing about modular home loans which makes it important to have a lender that has experience in this type of loan is that the payment schedule must include a payment to the manufacturer for the total amount of the home at the time it is delivered to the home site. This is only a portion of your total cost, but generally the manufacturer will not release the house to be set on the foundation until it is paid for in full. As long as the bank is aware of this and has provided for it in the payment schedule this should not pose any problems. There are many banks that have extensive experience dealing with modular home loans. Some seem to favor the builder more, some the home buyer. Ideally, the loan should allow payments to the builder in a timely manner so he has the money he needs to complete each step of the process, but still leave the builder with the proper incentive to finish the job on your timetable. If you have any questions about modular home loans or about modular homes in general, feel free to contact us and we'll be happy to help.