Modular Home Loan
Building a modular home will require financing that fits this need. Often, the borrower can use the same kinds of loans used by anyone constructing a stick-built home. Modular home's, though, are considered manufactured housing and therefore will be placed in their own lending category.
Modular home Mortgages
In the past, modular homes tended to be built on less permanent foundations. The concept of the "mobile home " evolved from the need for inexpensive housing that could actually be moved around if the need arose. Today, modular home s are hardly ever moved once they have been placed on a lot, and some even have block foundations. From the lenders point of view, a permanent foundation means a better lending risk.
A fixed modular home, on a lot owned by the borrower, is usually not mortgaged as mere property but as an actual home that qualifies for a standard mortgage. Consequently, lenders may offer better rates on a construction loan. When building a modular home, there are two construction loans available, one of which will allow the borrower to combine the construction loan with the permanent loan.
The builder can often assist with the financing of a modular home, or he can steer you towards a mortgage company that handles manufactured housing loans. These companies will be familiar with the options, and give a realistic idea of the costs involved in financing a modular home. The terms and rates are often different from those of a traditional mortgage, so it is worthwhile to consider a larger down payment or other ways to ensure the best possible deal.
Just as the manufactured home is different from those that are stick-built, so is the loan needed to finance its construction. This is mainly because of the special considerations required of manufactured home building. All homes of this type must be built in accordance with Federal standards, which deal with many factors that relate to, among other things, the quality of construction and the ability of these home s to resist high winds.
Modular home loans are Specialized
The modular home loan will be dependent on the situation that exists at the time. If the home is being sold separately from the land, then it may be considered personal rather than real property when financing is put together. The borrower will be offered a personal loan at a higher interest rate, but it may be possible to lower this rate by putting more money down on the home.
If the borrower is purchasing the land and the home at the same time, then a land-home mortgage is a possibility. This transaction is just like the purchase of a stick-built home on a piece of property. Federally-funded programs may give those with less money to put down more options, but they involve more paperwork and therefore take more time to get approval.
Whatever loan ends up being the right one, today is modular home owner has a better chance of getting good rates and terms than ever before. As the quality of construction improves and the perception of these home s as permanent becomes widespread, the lending industry has come to recognize that modular home s can be considered real property. Thus, they can be mortgaged in ways similar to a traditional home that is built on-site.
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