If you are planning to build a modular home, you will need to pay the modular home manufacturer for the modules, and the general contractor for the installation and final setup of the home. In addition, if you do not own the lot to build the home you will have to buy it as well.
There are the three main sources of these funds – the first one is private funds, like equity loan, personal savings, or family loan; the second one can be a lending institution like a bank, a mortgage firm, or a credit union; and the third source can be the loan from a general contractor.
There is one big difference between paying for an existing manufactured home and paying for a new home. If you are buying an existing home, you will need to pay the seller full amount before you can occupy the home. However, if you are building a new home, you can make periodic payments as the work is completed. This will offer protection to the homebuyer and the moneylender in case, if something prevents the builder from finishing the work of the home.
The homebuyer cannot wait until the construction and setup of the home is finished completely to pay the money in full, as the dealer and the general contractor will need money to pay for labor and materials as the construction progresses. Getting compensations with the progress of the job can also offer protection to the dealer if something prevents the buyer from paying for the home.
Financing with Lenders
If you use a lender to build the home, you will get a “construction loan”, which is a short-term loan that should be repaid in duration of four to twelve months. This loan offers a series of payments as the construction and setup is finished. After the building inspector in your area issues the certificate of occupancy, the lender will pay off the construction loan and will issue you a mortgage.
You may seek opinions of the lender and a financial adviser before deciding on the type of loan, the repayment terms, and rates. In addition, many of the lenders offer information on these details on their websites. These websites can also help you understand more on the loans offered for manufactured homes construction and installation.