Construction Loans are Different

A construction loan is a short term loan (usually 6-9 months) that provides you with money to purchase your land, modular home, and complete site work.  If you already own your land, usually little or no cash down payment is required.  When the house is completed, the construction loan is "modified" or converted into a standard mortgage.  The first step in building a new home is to get pre-approved for a construction loan (which is quite different than being pre-approved for a "regular" mortgage) and find out how much money you can borrow.  Utilizing a bank with experience in modular home construction financing will save you both time and money.

Loan Choices

Construction loans have varying features for homeowners seeking a short-term loan.  The main feature a homeowner should seek in a construction loan is the roll over feature at the end of the building phase.  The roll over feature allows the homeowner to "modify" the construction loan to a regular mortgage without paying additional  closing costs.  The choices for construction loans and features of roll over depend upon the lender and the requirements of their particular construction loan programs.

Building Your Dream Home

Financing the construction of your new home may require a construction loan from a bank.  A construction loan is considered a short-term loan and requires interest-only payments during the construction phase of the project.  A construction loan is processed in a similar way to a standard loan, with closing costs and reviews.  Try to compare the features available to you when applying for a construction loan.  The most important feature of a construction loan is the roll over option for closing cost savings.

 

Loan Maturity

mortgageA construction loan is a unique, specialty type of loan--that's why it is so important that you obtain your loan from a bank familiar with modular home construction loans.

A construction loan is a short-term loan and varies greatly from a standard mortgage loan.  The length of the loan and payment of interest only are the primary differences.

The funds from your construction loan are usually released as needed for the building of your new home.  Payments for the construction loan are usually interest only.  Construction loans are designed to be repaid when the construction period is completed, usually by converting or modifying the construction loan into a standard mortgage. 

Can I Finance a Modular Home?

Yes!  Construction financing for modular homes is available through a number of banks and mortgage companies. Please click below for more information about modular home construction loans.

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