Financing

[Sidnee]

This morning I spoke with a banker about a loan for a new modular home. We were thinking of going modular because of the financing, insurance, and resale issues that are supposed to be improved with a mod vs. MH.

I was told that the bank requires 20% down and the interest rate will be about 1% higher than a stick built. This is on a variable rate, construction loan. The down payment is standard for their construction loans (with stick built, you can use the equity you have in your home once it is built towards the down - didn't ask if this was an option w/mod). If we convert to fixed once the house is done, the interest may be different.

Is this normal? I'm wondering how people are managing to put up MH if this is the standard. Is it better to not go through a local bank and use the manufacturer/dealer financing?

BTW, this bank has already preapproved us for a regular home loan at 5.6%.

Appreciate your help!

[rmurray]

All rates in the mortage business are quoted with 20% down..but most mortgage companies will finance with as little as 3% if there is PMI added to the losn..PMI is private mortgage insurance...Which helps the lender in the event of a forclosure..From the confusion you aree having..you should allow the dealer/builder the chance to help you through the maze..Construction loans are usually about the rate you mentioned...But few mortage companies will lock rates for the final loan long enough to assure you what your rate for the long term will be..Give the chance for the builder to help you...

[Sidnee]

Thank you for your help. If you don't mind, another question...

We are looking at Patriot Homes, but are not thrilled with the salesman we spoke to at the dealer in our town. How difficult is it to work with a dealer who is 60 - 120 miles away? Those seem to be our closest alternatives.

Again, thanks.

[rmurray]

You should be very comfortable with all the folks you will have to deal with in the dealership..The dealer will have no problem respondinfg to considerations in the case of 60 miles...at 120..it would be very hard to respnd in a timely mannor...

You should visit the book store here and spend a few dollars on John Grissom's book....It could help you save thousands of dollars..and more important save you lots of heartache....This is a small investment for your future...REMEMBER KNOWLEDGE IS POWER...