Understanding How Modular Home Construction Loans Work

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. We recently posted an article about how mortgage loans differ between traditional built homes to modular homes. Well we wanted to break apart from that article (so to speak) in an effort to explain how construction loans work in your modular home building experience.

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.

Feel free to contact us today if you have any questions about modular home construction. Or even if you want to take a look at our inventory of beautifully built homes. We are more than happy to help any individual in regards to modular homes.

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