Modular Home Loans
Modifying a Modular Home Loan - Construction to Permanent
After your modular home is completed and you have a certificate of occupancy, you will need to convert your construction mortgage into a permanent mortgage. This process is called a loan modification.
- Modification Package - You will receive a modification package from the bank to modify the construction loan into a permeant mortgage. At this time the borrower can apply excess funds left over from the construction loan or cash money to reduce the principle amount on the mortgage to lower monthly payments.
- Escrows - The lender set up an escrow account earlier to hold monies for property taxes and insurance.
- PITI - Principal, Interest, Taxes and Insurance - a simple acronym the banking industry uses to simplify a monthly payment. Depending on the loan to value, a bank may or may not collect taxes and interest. If this is the case, the modular home buyer would only pay principal and interest payments and no escrow account would be set up.
- Final Inspection - The final inspection is performed to make sure the home is ready to move into the prefab houes. The final inspection will insure the home was completed as to the construction contract between the builder and home owner. The final inspection needs to be completed to convert the construction loan into the permanent mortgage.
- Final Lien Search - A final lein search will be performed at time of modification to insure their are no leans on the property. If a sub contractor has not been paid, they will place a mechanic's lein on the property.