Major Considerations When Financing Pre-Fabricated Homes

When it comes to finances, pre-fabricated homes are treated differently from other types of more conventional home builds. Pre-fabricated homes come in a variety of sizes, styles, and price ranges, and are one of the best options for homeowners looking for sustainable and easy-to-build housing. Nevertheless, there are some considerations that need to be made regarding the financing of these homes. 

Pre-Fabricated Homes Can Be Funded through Traditional Mortgages

Conventional construction mortgages can be used in the building of a pre-fabricated or modular home. They cannot be used when building a mobile home — a mobile home requires a specific type of loan. This is one of the largest considerations for those who are deciding between the two types. Though a modular, pre-fabricated home will generally be more expensive than a mobile home, the difference in funding options may be enough to still make a pre-fabricated home the better choice financially.

Pre-Fabricated Homes Come in a Wide Range of Quality Levels

Quality levels need to be considered if a property owner is considering later selling the property or taking out a home equity loan. Prefab homes in San Diego can range from affordable “tiny houses” to quite expensive luxury builds. A home is considered pre-fabricated if the parts are created somewhere else and merely assembled on-site. It cannot be assumed that a home is cheap or that it is of low quality because it is pre-fabricated. But because of this, a home buyer has to be especially conscientious when they compare different builds. The type of pre-fabricated home selected will greatly influence the assessed value of the property and its sale value later on.

Pre-Fabricated Homes Require a Land Purchase

Mobile homes — even ones that are built to be stationary — have an infrastructure that can be moved if necessary. This is why mobile homes can commonly be placed on leased land. Modular homes are different: though some of them can be disassembled and moved, the majority are not meant to be moved once they have been fully assembled. This provides for unique designs and architecture when compared to traditional mobile homes, but it also means that the home buyer will have to purchase land before they purchase a modular property. 

Financing a pre-fabricated home is very similar to financing a conventional property. There are only two major differences: the pre-fabricated home will not cost enough and will need to be purchased separately from the land that it is to be put on. Many companies that sell modular homes also have relationships with local financiers, to make the process easier for the customer. 

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