Financing Your New Home

It is fairly common that you might need to secure financing for your new modular home, cottage or park model, and/or the land that you need to place it on. Generally speaking, financing looks different depending on your specific circumstance, but we’ve tried to give you some insight into the two most common situations we encounter.

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Farm / Acreage / Infill

Assuming the home is going to be your primary residence, financing a new modular home is typically treated like a new home construction loan by lenders and major banks, with funds being released in various stages of completion.

Modular Housing Community

Financing a home to go onto leased land is considered to be a higher risk loan (because the home is easily relocatable) so 100% of these mortgages will need Canada Mortgage Housing Corporation (CMHC) insurance, no matter your down payment. CMHC has created a program called “CLIP” or “Chattel Loan Insurance Program” to ensure that buyers looking to move into a leased land situation can still secure favourable mortgages of up to 95% of the purchase price.

Things to be prepared for…

You will need to verify your income

No matter how much your lender likes you, you will still need to verify your source of money. Your lender will want to be sure that you can not only cover your monthly mortgage payments, but also service your pre-existing debt load. You shouldn’t be spending more than about 30% of your income on mortgage related expenses.

Your lender will want to know details about your income and job to make sure your income is sufficient, and your position is stable to continue making mortgage payments throughout the entire term period.

If you are self-employed, there may be a little bit more paperwork to do and you’ll need to have your tax returns completed to prove income.

You will need to prove your down payment

Here are the generally acceptable sources:

Savings or statement of investments from the last 90 days
Sale agreement of an existing property
Withdrawals from your RRSP through the Home Buyer’s Plan (HBP)
Gift Letter (if applicable). If any money that you are using toward your down payment came from a friend or family member as a gift, you will need to supply a Gift Letter stating that the money is a gift and not required to be paid back.

Ready to Proceed?

Financing a modular home can have its own unique challenges, but rest assured we are available to walk you through each piece of the puzzle. We have an amazing lender that we work with all the time. We would be more than happy to refer you to meet with them to chat about your circumstances.

Let’s get started on building your dream! Give us a call.

Financing Your New Home

Farm / Acreage / Infill

Modular Housing Community

Things to be prepared for…

You will need to verify your income

You will need to prove your down payment

Ready to Proceed?

Let’s start a project together

Sales - Acheson

Sales and Service - Morinville

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