Affordable ways for first-time homebuyers, retirees and those in rural areas to have a home of their own, loans for mobile homes are available to qualified buyers. Some even have loan terms as long as those on single-family homes do. If you a considering the purchase of a mobile home, you need to know their types and the financing available for their purchase.
Of course, whether you buy a mobile home and place it on a rental lot, purchase land for its placement or buy a mobile home already on a lot, your financing will depend on your credit score and credit worthiness. The better they are, the better deal you will get with a lender, even if you do buy a mobile home by itself.
How Do Lenders View Mobile Home Loans?
Property types determine the kind of loan you can finance, and although a single wide mobile home or park model home can be financed, a loan can be costly and most conventional lenders won’t touch them. Since the wheels can be re-attached and the house moved, lenders see them as a higher risk than single-family homes and treat loans on mobile homes much as they would a vehicle. The loan term will be shorter and the interest rate higher unless you have stellar credit.
How Do Lenders View Manufactured Home Loans?
Both a mobile home and a manufactured home are built in a factory and delivered to your site, but from there the difference ends. A mobile home will arrive on its own wheels to your site. Manufactured homes are delivered to the site via flatbed truck and are then attached to a permanent foundation, never to move again. Loans on a mobile home and land or manufactured home and land packages are treated as a construction loan used for the construction of stick-built houses.
When using a construction loan, the lender will disperse enough to purchase land and the home and will charge interest on the loan until the home is placed and ready for occupancy. At that time, the construction loan can be turned into a long-term mortgage and you can enjoy a new home with the warranties and guarantees that come with new mobile homes and manufactured housing.
What Is the Best Way to Get Financing for a Mobile Home?
FHA does offer a way to purchase a mobile home and place it on a rental lot if you qualify for their program, but for the best value, purchasing land and a mobile home will give you a home with land to sell in the future if you choose to move. Owning the land will make it easier to sell.
FHA has loans for land home packages at favorable rates for qualified buyers, too. If you are buying a mobile home along with the purchase of land, conventional lenders will look more favorably on a mobile home purchase.
Considered “unique loans,” when you are considering the purchase of a mobile or manufactured home, get prequalified and know where you want to place the home before purchasing. Many mobile home dealers will offer land/home deals to purchasers, and for some mobile home purchases that may be the best alternative. However, talk to lenders before you ever step onto a dealer’s lot and you may be able to save a considerable amount on your mobile home or manufactured home purchase.
The term of a loan will be lower for a mobile home than for a manufactured home on a permanent foundation, as will the interest rate you will pay for that term. A manufactured home on a permanent foundation can be financed much like a single-family home.
Have You Considered a Modular or Prefabricated Home?
Built as modules in a factory, from stock plans or your custom design, module homes are taken to your site in modules and placed on a pre-prepared foundation, tied down and finished. When building a pre-fabricated home, sections are sent to your site, assembled and finished. Again, neither of these structures arrives on its own wheels and it is designed to stay in place after being assembled and finished.
Lacking the HUD tags and restrictions of mobile homes and manufactured housing, the financing available for modular and pre-fab homes are much like those for conventional single-family homes, giving you their terms and interest rates.
Do You Know the Options Now, When buying a Mobile Home?
Everyone’s requirements for a home are different and a mobile, manufactured, module or pre-fabricated home may be a great option for you. Whether you are a first-time homebuyer, retiree, or need a lot of bedrooms at a reasonable price, a new mobile or manufactured home may be the most cost-effective way for you to pay for housing. In some instances, you will have more space for less cost than if you were renting. Although, mobile homes on rental lots don’t hold their value like a single family home, mobile and manufactured homes that have been attached to land do and may show increased value over time.
There are many alternatives when looking for a home to buy, and millions across the country have found mobile and manufactured homes to be a great way to fill that need.
2 Point Highlight
Affordable ways for first-time homebuyers, retirees and those in rural areas to have a home of their own, loans for mobile homes are available to qualified buyers.
The term of a loan will be lower for a mobile home than for a manufactured home on a permanent foundation, as will the interest rate you will pay for that term.
