As with any new home purchase, the first task is to define
what you can afford. This saves a great deal of
inconvenience later if you realize what is within your
budget. In order to figure this out, meet with a mortgage
broker or lender. This defines the pre-approval process. If
you are serving as your own general contractor, be sure
that the lender also offers "sweat equity" loans so that
you can get the best deal. After evaluating your income,
your credit, and your debt to income ratio, your lender
will be able to give you an answer. Usually within 24 to 48
hours, you will know what your finances allow in terms of
affordability. Additional information such as required
escrow funds and down payment at closing is also provided
most of the time.
Once you have been pre-approved, you will then figure out
the exact costs of the project. For most people, it is
recommended that they take their pre-approval figure and
reduce it by 15 percent. This allows some built-in room for
extra expenses along the way. Once you have selected your
modular home style, design, and amenities, manufacturing
costs will be secure. It will be your task with your
builder to specify all the other costs that will be needed
to finalize your closing costs form with your lender. These
expenses will include excavation and landscaping costs,
finishing work after the set, land lot costs, permitting
expenses and several others. These are important to know at
the beginning so you can hold your builder accountable.
When ready for closing document preparation, your lender
will need engineered drawing plans for your modular home,
the home's order sheet with specifications, a complete list
of costs from your builder, a legal description of your
lot, two years of employment history, and two months of
recent bank statements. In addition, the lender will order
an appraisal and title search for the property to make sure
the appraisal covers the financing and that no liens are
attached to the property. These are all standard steps of
the financing process.
Depending on your situation, you likely will have a
construction loan during the construction period before the
actual mortgage loan is closed at completion. A
construction loan basically allows you to pay your builder,
your subcontractors, the manufacturer, etc. along the way
before the final home closing is performed. Did you know
the driver upon delivery of your modular home expects
payment for the delivered modules? It would be an issue if
there were no means to pay him. As work is completed, each
vendor will expect payment, and a construction loan makes
this easy while the building process proceeds.
Overall, because costs are more secure with modular homes,
there are usually less surprises at closing that might
otherwise occur with site-built home construction.
Likewise, since modular homes are a better investment
overall, the chance an appraisal will come in less than the
amount financed is also uncommon. Modular homes actually
give you the best ability to stay within your budget.
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Michael Zenga, the Modular Building Specialist, founded ZN
Custom Building, in 2002 which specializes in building
modular homes in the Boston, MA area. Visit
http://www.zncustombuilding.com if you need a Modular Home
Builder near Boston, Massachusetts.
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