Type “modular homes” into your browser and you’ll be inundated with picture after picture of spectacular houses, built in a factory but standing as proud as any home constructed on-site. Decades ago, modular home building was projected to become the norm. However, in the years since, the actual number of modular homes built in the United States has remained relatively small (around 14,000 last year).
Despite its slow growth rate, advocates of modular housing still project a bright future for what has occasionally been referred to as “the holy grail of housing.” The acceleration of information technology over the past decade has made the market for modular construction a far more interactive experience for the homebuyer, in that you can go online and decide what you want down to the last detain, order it, and have it appear on your lot.
Modular homes are factory built to local building codes, and offer a number of advantages, not the least of which is increased design flexibility resulting from advances in computer aided design (CAD) processes. This often makes custom housing construction more economical than conventional on-site construction.
Financing a Modular Home
Financing a modular home is a relatively simple process. You can get a conventional mortgage and assemble the structure on any lot which has been zoned for single-family construction. Once Upon qualification, banks will usually issue you a loan that goes through two stages. These are known as construction-to-permanent loans. Until your home is complete and receives its final appraisal, the loan will be a construction loan. During this time, you will be making “interest only” payments. Once the home is complete, the loan will become a permanent mortgage. At that time, you’ll begin making regular payments against the total loan amount.
When you buy a modular home, you not only need to supply the land, you also need to hire a builder to assemble the prefabricated elements on your site, plus hire plumbers, electricians and other tradespeople to do finishing and utility connections and meet whatever zoning and building code requirements are set by your municipality.
When choosing a contractor to assemble a pre-fab home, experience is extremely important because time is of the essence. Remember that you’ll be making interest payments to the bank every month while your house is being constructed, you won’t be able to make payments against the principal until your home is complete and passes all necessary inspections. Therefore, it’s imperative when selecting a builder that you are able to agree upon a realistic time frame for completion based on the builder’s previous experience with modular construction.