The popularity of modular homes over the last few years has urged many customers to build a modular home instead of constructing a conventional home. If you were planning to build a new home, then you should know a few things before starting the construction. Financing your home is one of the most crucial points to note.
Most of the banks generally offer a loan that actually goes through two different stages. These loans are generally referred to as construction-to-permanent loans. The loan will continue to be a construction loan unless you finish the construction of your house and receive the final appraisal. You will only have to make “interest only” payment during this period.
When you finish the construction process of your modular home, then the loan offered by the bank becomes a permanent mortgage. This means that you will have to make regular payments to the bank until you pay the total loan amount. Below is how you can finance your modular home.
Get a Prequalification Estimate
The initial thing that you should do is to get an estimated figure on how much money you will need to spend on your new modular home. If you provide your financial details and general credit history, then your bank will be able to offer a rough estimate on how much money they would lend you for your new home.
The next thing to do after getting an estimated figure on how much money you are going to spend on your new home is to compare the rates offered by different banks. So, make sure to get quotes from at least three different banks, as it will help you to get the best possible deal.
After you have picked a land of your choice for your new home and you have reached a conclusion on which bank offers the best deal for you, then proceed to the next phase of applying for the loan. You will need all the following things in order to apply a loan for your new home.
- Manufacturers contract for the new modular home that you are planning to buy;
- Your W-2s from the last 2-3 years;
- Federal tax returns;
- Employment proof;
- Detailed account information of your debts and assets;
- Your work history for the last 5 years;
- Details on outstanding loans;
- A certified bank check;
- Blueprints of the new home; and
- A letter of intent of sale.