You want a modular home, but you aren’t exactly sure how to pay for it. The good news is that you can most likely get a construction loan without much hassle. Here’s everything you need to know about them and how you can get one.
A construction loan is a short-term loan that lasts throughout the duration of the construction process (usually between four months and a year). After construction is completed, an inspector will issue a “certificate of occupancy” that states that the home is complete. This is when your lender will pay the loan and provide you with a mortgage for the modular home. If you decide to use a lender to finance your new modular home, you’ll need a construction loan.
A construction loan will come from a lending institution, usually a bank, credit union, or a mortgage company.
In some cases, the monetary source might be the modular dealer or modular general contractor. Be sure to read up on what your modular home builder offers for financing!
A construction loan protects you (the buyer) and the lender in the case that an unforeseen obstacle arises during construction that prevents the completion of the project within the timeframe initially intended. Securing this loan can prevent the stress of having to find an alternative place to live if your house isn’t completed in time. It also prevents the modular home company from rushing their work and delivering an inferior product.
If the construction company or modular home dealer finances the construction, you do not need to secure a construction loan.
This is most likely to be the case if the dealer is also the general contractor. It will almost definitely be the case if the general contractor owns the land. If they own the land and the responsibility for the build, their risk of losing out on potential income is greatly reduced in the case you decide to not buy the finalized home. For more information, read up on everything you need to know about modular homes.
Century Homes has met the dreams of homeowners seeking beautifully personalized modular homes. Our unique, exciting options allow you to custom design your modular home to your individual taste preference. If you’re interested in learning more about working with Century Homes to build your dream modular home, contact us today!