Modular Home Loans
Modular Home Construction Loans
Your construction loan is disbursed as your home is completed. The disbursement schedule was prepared during the disbursement step of the modular home mortgage. You construction loan is in place to pay your modular home builder or genial contractor for his services and that of his sub contractors - including the modular home factory.
- General Contractor Deposit - The general contractor will require a deposit to start work preparing your building site for your foundation. Often the general contractor deposit is made from out of pocket funds that were included at the loan application stage for your prefab home mortgage. If you have a large equity stake in the property, often banks will consider this as your initial contribution to the building project.
- Reimbursement for Borrowed Deposit - Often the home owner will spend money out of their pockets to prepare the building site, have land surveys, engineering money or building deposit for the modular home, and etc. The borrower must show the bank proof of any out of pocket expenses - Keep the canceled checks and a copy of all documentation including receipts. If you have little to know equity in the property, the bank will not reimburse you for these initial expenses. The bank makes sure it stays in an equitable position through out the building of your modular home.
- Draw Request - As your modular home is being built, the general contractor will request draws to pay for his sub contractors. The draw request can be requested by either the builder or the you the home owner builder. The bank will then order an inspection for the draw.
- Inspection - The bank will contact an independent third party to inspect the construction project to insure that the tasks have been completed as per the contract. After the inspector visually insures the tasks on the prefab home have been completed, he will send a report to the bank to release funds. If you are in a remote area, you should request a draw request earlier than needed on your modular home construction. At times in remote locations it might take a week for the inspector to schedule a visit.
- Interest Payments - During the construction of your modular home, most banks require you to pay the interest on the construction mortgage. The interest only payment secures the permanent mortgage amount on your modular home.
- Lein Search - Lenders often order a lein search on your modular home's building lot to insure no liens have been placed on the property since closing. Most lenders do only request a lein search if it required by your state or local government.