Finanicing Your Home Building Dream: "Panelized Kit Home Packages" Home in a Package, Money On A Platter

Do you want to know perhaps the easiest, quickest and most reliable way to financing the building of your dream home? If you want to roll everything together, house plans, building materials, shopping, decisions, and financing, then using a panelized home or kit home package just could be for you. nnTheir convenience is the biggest draw when building and financing a new home this way. Usually, the application fee is minimal and the approval process is handled by the company. Part of the motivation to get you approved for the loan is the underlying desire to sell you the profitable home package.nnIf you have been reading my other articles on financing the construction of your home building project then you know that banks, mortgage brokers, and other sources can be used instead of the packaged home company. These articles will even help you understand how the kit home companies do it when providing funding for your construction. nnWHAT IS A PANELIZED HOME OR KIT HOME PACKAGE?nnBefore I go into the financing discussion I should give you a little background on what panelized and packaged homes are. There are a number of companies in the US and Canada (not to mention other parts of the world) that offer complete home building packages for people who want to be involved with building their own homes. Whether you want to do the work yourself, or hire the labor, you can utilize their services for building materials, home plans, pricing controls and even financing with construction loans. nnSome of the companies have their own banks and provide the financing "in house" but most affiliate with lenders who offer financing as long as the housing company provides some assistance to the builder. These home companies not only provide a house plan and building materials, but they often provide a helpful management structure for the home builder to follow to help them complete the entire process. nnHOW DOES THE FINANCING WORK?nnOffering financing helps the packaged housing company in two ways. First, it helps them sell more homes if they can approve you for a loan at the same time. Secondly, if they are involved in your construction loan qualification, they have a better chance to control that process and keep you as a client. nnHere are the typical steps taken when you apply to purchase a home from a package home company and utilize their financing offer.nnSTEP #1: Complete financial paperwork for a pre-approval to be accepted into the loan and home building program of the housing company. This usually takes a week or two and they will inform you as to how much you qualify for in a construction loan.nnSTEP #2: Work with one of their agents and select a house plan or provide your own and have them price it out for the materials package cost. This process may take a short amount of time if you use one of their plans but could take much longer if you supply your plans for them to price.nnSTEP #3: With the assistance of the housing company, you can then add the likely costs of building that home on your parcel of land including utilities. You'll get the cost of permits and fees for the local building authority and the cost of additional building materials you'll want to buy locally (that is, not from the housing company.)nnSTEP #4: Take the total cost for labor, the total cost of materials, the cost of the building permits, the expense of bringing utilities to your lot and submit this with your plans to a local appraiser to determine the future value of your home. The cost to build should ideally be no more than 80% of the future value of the new home.nnSTEP#5: If all works out well, the housing company and lender will jointly approve you for the construction loan and accept you into the building program. The housing company may or may not be the ones directly working with you on the loan portion of the process but their program is a strong component of your acceptance by the lender. nnAs a final note, it is important to choose the packaged, panelized home company well! They are not all alike and they are not all good. Please use diligence in researching them before you get too involved in any lending approvals. Do not allow yourself to let the financing offer alone be the reason you select one of these companies. That being said, choosing the right company can make this a great choice for your home building financing needs. Happy Homebuilding!nn