If you are planning to build a modular home of your dreams by hiring the best modular home manufacturers in your area, then the first and foremost thing to do is to have a clear understanding on modular home construction financing. Below are seven main parts or steps of financing the best modular homes, which will help you understand everything about modular home construction financing.
A modular home mortgage pre-qualification will allow the homeowner to know how much buying power he or she has. In addition to that, it will also give you a clear idea on the budget that you can work with for building your dream home. The main purpose of this short and quick process is to give a rough estimate to the homeowner.
If you have already found a suitable location to install your modular home and have decided the home plan, then it is time to start the formal application process. This particular process requires several items including a check, W-2 filings, proposed home contract, and a few more items. Get in touch with your modular home manufacturers to know which all documents you will need for that.
If the financial institution is happy with your credentials, then they will offer a formal commitment letter to you. This letter will specify the amount that they are planning to offer you for the construction of your modular home.
After the financial institution has approved your mortgage, you will have to establish a disbursement schedule in order to detail how much money will go to the vendor and the time intervals at which you will be delivering the money to the vendor.
If you have finished agreeing on a specific disbursement schedule and if you have honored all the conditions and restrictions put forward by the bank, then it is safe to assume that your loan or mortgage is settled or closed. You will have to sign a few loan documents at this point of time.
Building the House
Now, you can start the construction of your modular home. However, you will have to make payments to the vendor after reaching each building milestone, as specified in your loan agreement with the bank or financial institution.
Transferring From Construction Loan to Permanent Mortgage
Once you finish the construction of your new modular home, your construction loan will gradually change into a permanent mortgage. This means that you will have to pay the transfer fees of the construction loan to the permanent mortgage.