What is the process?

For a bank to loan money to you to purchase a home, they need some form of security for the loan whilst the home is still under construction.In the case of a conventional home build, the security is usually a mortgage on the land plus the portion of the house that has been constructed to date. With a modular home, the bank ONLY has your land as security during the construction phase.

The majority of a modular home is constructed off-site in a factory and therefore built on a different premise to the mortgaged block of land. This means that the bank has no mortgage, and therefore no security, on the modular home whilst its still under construction. In our experience, we find that most banks will not release progress payments until the home has been fixed onsite or until the final completion of the project.
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Talk to your home loan provider

From our experience, we recommend that you approach your preferred bank or credit union very early in your decision making process and make them aware of your intentions and how much you will be needing to borrow. Depending on your equity and overall financial situation, your bank or credit union will then advise how they can assist you.

It will be necessary to explain to the bank that they will be financing a fully completed new home and that you are not purchasing a kit home (AKA a flat pack home). Kit homes are much more of a challenge to secure a loan for. 

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Let us help secure your loan

Banks will often advise that they will not release any payment to a home builder until the home is fully completed, or at least installed on-site. To overcome the issue as to a lack of security, most modular builders (such as Westbuilt Homes!) will help negotiate with the bank to amend the standard payment terms.

We are able to work around the usual payment terms on the condition that the bank provides us with a copy of the loan approval and a ‘to-be-built’ valuation.

If your bank will not release payments until practical completion of the project, a 1.5% finance surcharge will be added to your purchase price. This is to cover the cost of Westbuilt providing debtor finance for the home while it is still in the factory.
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Talk to our valued finance contacts

Over the years, Westbuilt has developed a working relationship with both Aussie Home Loans and the Regional Australia Bank in order to help our customers smoothly secure financing. 

Get in touch with us or our finance contacts below for more in-depth details surrounding this step. 

Aussie Home Loans

Trina Farren-Price
M: 0411 411 662
E: trina.farren-price@aussie.com.au

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Regional Bank Australia

Mark Amos
P: 02 6776 6404 | M: 0429 014 857
E: mamos@regionalaustraliabank.com.au
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Aussie Home Loans - Ipswich

Kit Johnson
M: 0438 887 851
E: kit.johnson@aussie.com.au 

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Your Finance Broker - Coolum Beach

Teressa Fisk
M: 0411 893 627
E: Teressa@yourfinancebroker.co
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Aussie Home Loans - Tamworth

Matthew Davies
P: 02 6766 5163  | M: 0434 675 185
E: matthew.davies@aussie.com.au
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Ready to start your modular home journey?

If you think that building a modular house is the best option for your next home, talk to the team at Westbuilt.
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Modular Home Financing FAQs

Can I get a loan for a modular home?

Yes, securing a loan for a modular home is much like obtaining a loan for a traditional new build, and most major financial institutions offer this option.

What if my bank doesn't finance modular homes?

Some banks may still be reluctant to finance modular homes, though this is changing as modular construction gains popularity. If you encounter difficulties, consider reaching out to one of the brokers or banks listed above.

What is the process for getting a loan for a modular home?

The loan process can vary by institution, but generally follows these steps:

    1. Initial Discussion: Speak with your banker or broker to discuss what you want to do. During this step, the bank may grant you pre-approval.
    2. Application: Once you are happy to proceed with getting a loan, the bank will require you to start the application process. Please note that the timeframe of this step can vary greatly depending on your circumstances and the bank's process.
    3. Valuation: As part of the process, the bank may conduct a desktop valuation of the project to ensure that it represents market value.
    4. Approval: Once you have completed the above steps, the bank will approve your application for a loan and make funds available for you to pay for your home.

My bank says they won’t release the money until the home is on-site. Can you help?

Yes, we can offer in-house bridging finance at competitive rates to cover progress payments while your home is being built. Contact your consultant to discuss options. Note that a deposit and initial progress payment of at least 10% are required before we start construction.