Acquiring Loan for Prefab Tiny Homes
Prefab tiny homes are an affordable housing option for many American citizens. Owners of prefabricated homes are able to enjoy all the comfort and convenience offered by a conventional site-built home at an affordable price. This is one of the reasons that made prefab tiny homes popular among American citizens.
Many people who are planning to build small prefab homes often ask their homebuilders whether they are eligible for first-time buyer programs or not. Most of the first-time homebuyer programs offer loans for modular or prefabricated homes and they usually include low closing costs and smaller-than-average down payments. This means that you will be easily able to qualify for most first-time homebuyer programs.
Still, many prefab homebuyers in the country fail to understand the fact that there are plenty of additional financing options available to them other than first-time homebuyer programs. If you go with the conventional lender route, then you will be able to easily acquire a “construction to permanent” loan.
A “construction to permanent” loan usually covers the mortgage arrangements and home construction. If you acquire this loan, then you will have to pay a single set of closing costs and make the interest payments only during the construction phase of your home. The liability of your loan will be eventually rolled back into the mortgage after this phase.
You can also apply for two separate loans, one for the building phase of your small prefab home, and a permanent loan from another lender to pay off your construction loan. Yet again, it is significant to note that acquiring separate loans can be a little bit expensive.
You will also have to consider the fact that most prefab home manufacturers will demand periodic payments for financing the ongoing construction process of small prefab homes. Additionally, they might also ask you for a full payment before the work has finished. So, make sure to consult with your prefab homebuilder and enquire how the payments should be done.
In addition to that, you will also have to compare the rates offered by different financial institutions before choosing one, as it will help you to catch the best offer available to you. So, do a little research, take your time, and compare all the proposals for prefab tiny homes before reaching a conclusion.