How to Finance a Modular Home
Modular homes are often less expensive than traditionally built homes. Nonetheless, most people find it necessary to finance their modular home purchase. In most cases, you can finance your modular home through a modular dealer. If you need to obtain bank financing, you will likely need to apply for a construction loan through your bank.
- Prepare for the application process. Before you apply for a home loan, it is a good idea to check your credit. You should know your credit score as you enter the home-buying process. This is also a good opportunity for you to improve your credit score and correct any mistakes that may be present on your credit report.
- Save up your down payment. Most experts recommend saving a down payment of at least 20 percent of the purchase price of your home. This can be an overwhelming number. If you cannot afford to put 20 percent down on your home purchase, you might be required to purchase additional private mortgage insurance, which could raise your monthly payments.
- Obtain a pre-approval letter. Visit your bank or financial institution and inquire about obtaining a mortgage pre-approval. This is often a simple process. You will need to complete a loan application and the approval will be based on your credit score and monthly income. Keep a copy of this letter on hand.
- Find the home that you want. Purchasing a modular home is very different from purchasing an already constructed home. Visit modular dealers and see the styles and floor plans that are available. Choose a home that you like, but carefully consider your price range when making your decision.
- Complete your mortgage application. The mortgage application process can be very long and arduous. You will need to provide all of your personal information, as well as credit reports and bank statements. Complete all of the required paperwork and obtain approval for your mortgage loan. Once you have received mortgage approval, attend your closing and sign all of the loan documentation.