Modular Home Loans

Financing a modular home is different from financing a "stick-built" (site-built) home. Most modular homes are financed like personal loans and not like property loans. They are financed like a car or a television. Still, loans for modular homes are becoming increasingly more available, thanks to their growing popularity in the housing sector.

Modular home financing packages offer many features, such as fixed or adjustable interest rates, single permanent construction loans, financing up to 95 % of appraised value, year-long construction periods, steady rates for interim financing, and the drawing up of construction schedules suitable to the consumer.

One modular home financing option is the one-time close construction/single permanent rate, which is a one-step program in which the interest rate is fixed during construction and modifies into a permanent loan after construction. The two-step option allows you to borrow up to 95 percent of cost for a permanent residence and 90 percent for a vacation home. It is based on a prime rate during the construction period and allows for a 12-month construction phase. The third option is lot loans, which are for those who have found the lot or site but are not ready to build.

Consumers who finance their homes with a personal property loan (also called a chattel mortgage) do not have foreclosure protection like those available for real property home mortgages. When the customer or borrower defaults on a loan, the home can be repossessed like a car.

Fortunately, there are some foreclosure laws that protect consumers from sudden repossession. Most states stipulate that the lender has to inform the borrower about impending repossession well in advance and give ample time to cover up the default and retain their homes. In homes where land and home are financed together under a real estate mortgage (like site built homes), foreclosure requires a lot of procedure and time before repossession takes place.

In the past, modular homes loans were mostly treated like personal loans and hence not protected by foreclosure laws. For example, some still states allow a Power of Sale clause, in which the borrower allows the lender to sell the property if he defaults on the loan payment. This means that the lender does not need to go to court to obtain a foreclosure.

But due to the rising popularity of modular homes, the laws are now more sensitive to the rights of modular homeowners. For example, state laws of Judicial Foreclosure require the creditor to get a court order to take possession of the property. He must provide evidence that the loan is in default, and a notice must be given to the borrower before foreclosure procedures begin. In addition, the Right to Reinstate clause gives the borrower the right to make adequate payments and regain his property. Finally, a Limit on Deficiency Judgment prevents the lender from suing the borrower for the amount still owed on the loan after selling the home, if such a case arises after repossession.

Even better for the modern modular home owner is that some states have a Right to Cure law, which allows the borrower to catch up on loan payments and retain possession of the property before repossession procedures start. Some states even have a Statutory Right of Redemption, whereby borrowers can get back their homes a short time after their sale.

Modular Homes provides detailed information about modular homes, modular home builders, modular home loans and more. Modular Homes is affiliated with Storage Sheds.

________________________________

Reasons to buy a Modular Home

There are many reasons to consider buying a modular home these days. Today people are looking for value for every dollar spent, and modular homes offer just that. With the improvement in quality of modular homes, they can be a better choice then conventional construction in most areas. And don’t think that modular homes can’t live up to that dream house of fantasy. Today modular homes are built to more varied specifications and architectural designs then ever before including multi level, split level, post modernistic and many traditional styles. If it can be envisioned, more then likely there is a company that can modularize its construction. Here are some of the reasons that modular homes are such a great value.

They can be completed Faster

Modular homes from start to finish can be built faster because the greatest portion of construction, including HVAC electrical and plumbing are completed under what are usually controlled climate conditions in a factory. Most every thing is completed at the factory including the installation of cabinets and doors.  Most fixtures, plumbing and electrical are in place before the modular home leaves the factory. When the modular home arrives on site ready to set on its foundation, there is less for contractors and subcontractors to complete. This saves a lot of time due to weather and scheduling issues that always seem to arise with traditional construction. That means savings of time and as everyone knows, time is money, especially in home construction, which is reason number 2 in the list.

Saving on construction time saves big interest

With a typical construction loan, the first payments are basically interest. A common construction loan for a conventionally constructed home can be anywhere from 6 to 12 months long. With that in mind, consider how much will be saved in interest on the loan before it is converted to a conventional mortgage, if the construction time is cut from 6 months to 2 months. On bigger projects, the savings will be even greater. If you are required to carry the construction insurance modular homes can save even more.  Because the structure is not exposed to acts of nature during critical stages of framing and construction, insurance rates are much more reasonable as well.

Less Wasted Material

Because modular homes are constructed under climate controlled factory conditions, material loss is kept to a minimum. On conventional construction sites, losses can add up to big dollars, due to poor weather, theft, and over all poor construction conditions, making modular home construction again more cost effective.

More durable construction

Because modular homes must be transported sometimes many hundreds of miles from the factory to where they will be placed on a foundation, they are held to a much higher standard in most areas of construction, to be able to withstand being moved. Better flooring which can be varied may include engineered floors on top of thicker nailed AND glued sub floors.  Double and heftier constructed rim joists and thicker wallboard on ceilings and walls. Many of the added supports and bracing that are required for transportation can be left in place upon arrival which makes for a stronger more durable structure that holds up to the forces of nature better then do most conventionally constructed homes.

So if its time to consider a new home, its time to consider a modular home. The advantages are many the savings are great and the risks are few to none. Lending institutions are aware of modular home advantages and many times are more willing to process loans accordingly. Modular homes have come a long way since first conceived of. Do the home work, do the math, then do the right thing and look into that next home being a custom designed and built modular home.