FINANCING YOUR MODULAR HOME LOAN
Luxe Living Homes & Better House Brokers is here to help you organise your home loan
The process of securing a home loan for the purchase of a modular home is a little bit different compared to securing a loan for a traditionally built house.
For a bank to loan money to you to purchase a home, they need some form of security for the loan whilst the home is still under construction.
In the case of a conventional home build, the security is usually a mortgage on the land plus the portion of the house that has been constructed to date. With a modular home, the bank ONLY has your land as security during the construction phase.
In the case of a conventional home build, the security is usually a mortgage on the land plus the portion of the house that has been constructed to date. With a modular home, the bank ONLY has your land as security during the construction phase.
How to get your new modular home financed
- What you need to tell your home loan provider
From our experience, we recommend that you approach your preferred bank or credit union very early in your decision making process and make them aware of your intentions and how much you will be needing to borrow. Depending on your equity and overall financial situation, your bank or credit union will then advise how they can assist you.
It will be necessary to explain to the bank that they will be financing a fully completed new home and that you are not purchasing a kit home (AKA a flat pack home). Kit homes are much more of a challenge to secure a loan for.
- Helping you secure a loan for your modular home
Banks will often advise that they will not release any payment to a home builder until the home is fully completed, or at least installed on-site. To overcome the issue as to a lack of security, most modular builders will help negotiate with the bank to amend the standard payment term
We are able to work around the usual payment terms on the condition that the bank provides us with a copy of the loan approval and a ‘to-be-built’ valuation.
If your bank will not release payments until practical completion of the project, a 1.5% finance surcharge will be added to your purchase price. This is to cover the cost of Westbuilt providing debtor finance for the home while it is still in the factory.
- Talk to our valued finance contacts
Over the years, Better House Brokers % Luxe Living has developed a working relationship with a number of lenders and Brokers in order to help our customers smoothly secure financing.
Ready to start the journey of buying your dream modular home?
If you think that building a modular house is the best option for your next home, talk to the team .
For more information about budgeting for a modular home, click here to download our Pricing Guide. This guide was put together to help you get a ‘ballpark idea’ on how much budget to set aside to purchase one of our beautiful houses.
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