January 31st, 2013 | More in Home Finance

Palm Harbor Homes: Understanding a Construction Loan

Palm-Harbor-Homes-Construction-LoanGetting a new home is exciting and rewarding when you are working with the right builder and finance partner for you.

Navigating the waters of financing a modular home can be tricky, but here are a few suggestions for starting the process of financing a modular home.

• Create a budget based on your pre-qualifying estimate. Give honest answers to the questions asked by your loan provider. Doing so should provide you with a clear estimate of how much borrowing power you have. Once you know the approximate amount, you can start planning for your housing budget.

• Secure a construction loan. You will probably have to explain to your lender exactly how the loan will be used. This shouldn’t pose a problem, and companies like Palm Harbor Homes typically have a preferred financing company, so you can be sure you’re working with a lender well-versed in modular home construction.

• Get your agreement with the builder in writing. It is particularly important for you to have line item detail of all the costs, fees, and taxes, as well as a clear statement of each party’s responsibilities, a clearly specified time frame for construction, provisions for possible changes to plans or specifications, and a breakdown of the payment method and disbursement. Everything should be clearly written out, and signed by both borrower and contractor.

• Make sure the lender has properly structured your construction loan. An inexperienced lender can make mistakes like missing deductions, improperly completing the appraisal, incorrectly calculating income, and so on. Be vigilant on your own behalf, and make sure that your loan is in order.

• Get the right insurance. Your project will definitely require course of construction and general liability insurance, and may also need workers’ compensation if your builder has employees. The law may not require your builder to carry insurance, but the bank will, so make sure you are working with a reputable builder, with the right insurance, in order to facilitate your loan.

• Convert your construction loan into a permanent mortgage. You’ll need to have your home appraised to make sure that the value is accurate, the work has been completed, and there are no liens from the vendor. You’ll also have to pay transfer fees for the conversion, but, on the bright side, your mortgage will create a tax deduction.

It may seem like you bear a great deal of responsibility for your own construction loan, and in truth, you do, which is why it is so important to find a company that can help you navigate the process of securing your manufactured home financing. When you choose Palm Harbor Homes as your modular or manufactured home provider home provider, you’ll find that getting a construction loan is easy. Palm Harbor Homes has partnered with a quality lender, so that you can get the help you need, conveniently, in the same place that you shop for your modular home. For more information, visit the website, or connect more deeply by joining the online community on Facebook or Twitter.

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The opinions expressed by the article do not necessarily reflect the opinions of Palm Harbor Homes.


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