Understanding Construction Loans For Modular Homes
First, a construction loan for a modular home will carry a greater interest rate than a standard mortgage, because it is actually a line of credit and will cover only as much of the cost of building your modular home as been determined in advance. These costs will include the price of your building lot; the cost of all building permits and other legal fees associated with your construction; the cost of your modular home itself; and the costs of any labor and additional materials required to finish your home. modular home builder
You may also find a lender of construction loans for Modular Homes who will agree to include the amount of interest you pay during the construction and cover any cost overruns. When the work on your home is completed, the total amount you have run up on your line of credit will be converted to a standard residential mortgage.
What Construction Loans For Modular Homes Won’t Cover
You’ll need to find other ways to finance the early stages of your modular home instruction, including soil and perk tests, building plans, and your site plan, which must be approved by your municipal zoning board before you will be have access to the funds from your construction loan for a modular home.
How Construction Loans For Modular Homes Are Disbursed
None of the work being done on your modular home will be paid for until your lender has had it inspected, and when a particular phase of the construction has been completed and met inspection standards, payment will be made directly to the suppliers and subcontractors. If you need to ask for more payments than the number to which your lender originally agreed, you may be charged an additional fee for each extra payment.
Qualifying For Construction Loans For Modular Homes
Like traditional mortgages, construction loans for modular homes may require you to come up with a down payment. The chances of this will be higher if you are requesting a very large loan, or don’t own the lot on which your home will be constructed. But there are lenders of construction loans for modular homes who will give 100% financing even if the person building the home doesn’t own the lot outright.