The immense popularity and numerous comforts offered by prefab housing have attracted many customers towards it over the last few years. However, many prefab homeowners do not know that most of the modular home mortgages combine their home, land, and even site improvements.
You might be shocked to hear the fact that you can build a prefabricated home without spending any money from your pocket. However, financing can be a little bit confusing and a tough subject for people who are interested in building new prefab modular homes. So, make sure to consult with your homebuilder and with other modular homeowners to get a clear idea of financing a prefabricated home.
Financing a Modular Home
Several prefab homebuyers have a misconception that acquiring a prefab home mortgage is pretty much difficult. Some of them also claim that the borrowers will have to pay large down payments to the bank or lending institutions even if they acquire a loan. In reality, getting a home mortgage for your prefab home is actually a simple task and you will not have to pay any huge down payments.
If you are planning to buy an existing prefabricated home, then you should note the fact that the loan process is quite a lot different from building a new prefab home. In this case, you will only need a permanent mortgage, which is also known as an end loan since the construction of the house has already been finished.
On the other hand, when you are building a new prefab home, then you will certainly require a specialized financing, which will cover the construction and transportation cost of the structure. This type of loan is popularly known as construction perm, which is short for construction to permanent loan.
If you are planning to acquire a construction perm, then you should note the fact that this loan will pay both the suppliers and builder during the construction process of the home. However, it eventually becomes a permanent loan when the construction of your house is completed.
So, make sure to consult with your lending institution or bank and get a clear idea of what construction perm is. This will help you to avoid potential downfalls and other issues in the future.