Getting a mortgage without knowing what you’re doing can cost you thousands. Know the steps to follow for a no-hassle mortgage shopping experience to get through the process faster and do it right!
So you’ve decided you’d like to build a modular home. You’ve got an idea of the sort of home you’d like (maybe even a specific plan picked out), you know where you want to build, and you’re pretty sure how much you want to spend. In order to get this ball rolling though, before a modular builder or manufacturer will even take you seriously, you NEED to get pre-qualified and hopefully pre-approved for a modular home mortgage by a bank or credit union.
1 – Gather Your Documents
First things first, before you even think about doing anything else, get all of your documents in order. If you’re not a neat-freak who has meticulously filed everything in its proper place, this may take some time. Here’s a list of all the documents that you will need. Please note: that if you’re applying for a mortgage with anyone else (be it a spouse, child, parent, or benevolent benefactor) they must supply all of this information as well.
- Current pay stubs and 2 years W-2’s
- Tax returns for the past 2 years
- A detailed list of all your assets including:
- Bank statements for the past 2 months
- Investment account statements for the past 2 months
- Retirement account statements for the past 2 months
- Make and model of vehicles you own and their projected resale value
- A detailed list of all your debts including:
- Credit card account information
- Auto loan account information
- Personal loan account information
Remember, you’ll need all of this paperwork for everyone involved in the loan!
2 – Get Prequalified
Next you’ll want to get prequalified for your modular home mortgage. This is when the bank or lending institution uses all that information that you gathered in the previous step to tell you what sort of rate they might be able to offer you. Prequalification rates tend to be less precise than preapproval rates, so the rate they give you is non-binding for both you and the lender.
To get prequalified, they do NOT have to do a hard check on your credit score, so you can check rates with as many different lending institutions as you want without it having a negative impact on your credit score. Alternatively, you can use a service likewhich does the comparisons for you and offers you multiple different options all at once.
3 – Get Preapproved
Once you pick a lender who can give you a good rate, you’ll want to get preapproved. Preapproval is different from prequalification because it requires what’s known as a hard check on your credit score. This will temporarily damage your credit score so you want to be sure of the lender before asking for preapproval.
4 – Secure Financing
With your modular mortgage preapproval letter, modular home builders and manufacturers will know that you’re a serious buyer and they will iron out the details with you to start construction on your new home! Generally they will wait until they know that your budget is actually as high as you think it is since all too often, new home buyers assume that they will be approved for a loan that is actually out of their price range.
Now, good luck finding those W-2s!