Mobile Home Financing

Historically, manufactured homes were known as “mobile homes,” a term that a lot of folks still use. Manufactured homes are built in a manufacturing plant and are fashioned to conform to the rigorous Housing and Urban Development Code, which was instituted by the Federal Government to regulate safety, design, and structure of these homes.

The uncommon affordability of manufactured homes puts home ownership inside the reach of a lot of families who are priced out of the marketplace for traditional homes. Over the last few years, the rate of growth of the factory-made construction industry has been striking, and the affordability of these homes has played a role in getting rid of the roadblocks towards homeownership for many households. Millions of Americans live in mobile homes, which constitute more than 10% of the total housing market. Nowadays mobile homes offer the superior quality, economic value, and technologically advanced features that homebuyers want.

In spite of the popularity of factory-made housing, most mortgage brokers and lenders don’t care to meet the needs of manufactured homeowners or supply funding for mobile homes. Those that do will take in to account things like the foundation and type of substructure which are what allows for mobile homes to be classed as real estate.

If you can obtain a local lender to finance your mobile home, you’ll notice many similarities and several differences to conventional mortgage financing. Many mobile homes located on land now demand a 5 percent minimum down payment and loan conditions that finance the balance over 20 to 30 years.

Other loans, known as “chattel mortgages” are likewise obtainable from certain lenders. A “chattel mortgage” is a loan for a home where land isn’t a consideration, only the mobile or manufactured home, its self. This is of value for homes that are located in mobile home parks or rented lots.

Many times, the best place to look for mobile home financing is to go direct to the manufacturer. Mobile home manufacturers oftentimes offer in house financing programs at rates that are competitive with the industry standard.

Mobile Home financing isn’t confined to purchase loans. As a mobile home owner, you are able to also refinance your present loan, just like a traditional mortgage. If you’re looking to lower your rates and benefit from a monthly savings, you may be a good candidate for a mobile home refinance.

Although mobile home financing does differ from financing a traditional home, there are numerous options available to you. It is true that it can be more difficult to get financing for a mobile home. Despite the extra hassle, if money is an issue, purchasing one of today’s modern manufactured homes can be a great way to experience homeownership without breaking your budget.

Mobile Home Financing Options

For the longest time a manufactured home was known as a “mobile home” and to this day many people refer to them as such. Mobile homes are built in a large manufacturing facility. In this controlled environment the builders are required to build each home to the strict rigorous Housing and Urban Development Code. This code was created by the Federal Government to regulate their design, structure, and safety.

For many families the uncommon affordability of a manufactured home makes ownership a more likely reality if they are unable to enter the market for conventionally built homes. The low entry cost for buying a mnaufactured home has led to a dramatic increase in the growth of the factory made home building industry. It has also allowed many families who otherwise couldn’t afford such a purchase to enter the home buying market.

Mobile homes constitute a good 10% of the American housing market allowing millions of people the opportunity to finance and own their own home. The mobile homes built these days offer high quality construction, great value, and advanced features that home buyers can find in more traditionally built offerings.

While the popularity of factory produced homes has increased more and more home lenders and mortgage brokers have entered the mobile home financing market. This does not mean every bank or broker will finance a manufactured home but if you do your homework it isn’t too hard to find a lender that does. The main thing most lenders are looking for is can the mobile home in question be classified as a piece of real estate. To qualify is usually dependent on what type of foundation and substructure the home has.

The one thing you will notice if you find a local lender or mortgage broker to finance a mobile is that there are many similarities and a few differences to financing a stick-built home. In many cases financing a mobile home on a piece of land will require a minimum down payment of 5 percent of the purchase price. The re-payment terms will also finance the balance of the loan over either a 20 or 30 year period.

For a mobile or manufactured home located in a mobile home park or on rented land a chattel mortgage might be the way to go. This type of loan does not take into account what the land is worth that the home will be sitting on. It only finances the home itself, leaving the owner the option of moving the home if and when they want.

Another option for mobile home buyers is getting their new home financed through the manufacturer. In many cases the manufacturer can offer loan financing terms that are competitive with mainstream lenders. They can also bundle the cost of moving the home from the manufacturing facility to the homeowner’s lot into the loan.

If you already own a mobile or manufactured home you also have the option of refinancing your current mortgage, much like those with a more conventional mortgage. With today’s low rates this may be something to consider if you want a lower monthly payment. You can also use this type of loan to extract extra money from any equity that may be built up in your home. This money can be used to pay off other debts, make home improvements, or anything else you may need.

Even though mobile home financing tends to be a little different from mortgages for traditionally built homes there are a number of options that you can choose from. While many lenders offer different manufactured home loan options it can be a harder to secure financing for a mobile home. This does not mean you shouldn’t try because chances are good that you will find a lender willing to make your home ownership dream a reality.

Manufactured Home Financing and Mortgages

Financing a manufactured home can be confusing to the first time home buyer. The most common questions asked during this time are; how do I find the best loan and is it necessary to pre-qualify? Answering these two questions will help move the process along and give the home buyer the information they need to make an informed buying decision.

The first thing to do is find a loan that fits into your home buying plan and overall financial plan. This means shopping around for a lender that offers financing with the terms that best fit your situation. This means determining how much house you can afford through the pre-approval process.

All lenders will require prospective homeowners to be pre-approved before working out the details of the loan terms. During this process the lending institutions are evaluating your financial situation to determine if you will be a good risk for one of their loans.

Getting pre-qualified also allows you the home buyer the ability to know how much house you can afford once you begin hunting for your new home. This is also the time to start comparing loan terms from the different lenders who have pre-approved your application.

This is probably the most important part of manufactured home financing; be sure to shop around to different lenders to ensure that you get loan terms that work best for you. Lenders interest rates will vary and while it may not seem like much over the term of the loan a half of a percentage point can literally save you thousands of dollars. You’ll also want to check what sort of down payment may be needed and what other closing costs are involved. These can vary from lender to lender so be sure to read the terms carefully before deciding on a mortgage provider.

Knowing the basics of manufactured home financing and mortgages will be a benefit to you during your home buying experience. Finding the right mortgage financing that fits your financial needs will take some time but it is well worth the effort once you are able to move into your new manufactured home.

Manufactured Home Finance

Manufactured homes, like mobile homes, are housing units built in factories rather than being constructed at site like conventional homes. They are then taken to the place where they are going to be occupied, by tractor-trailers. They are usually much cheaper than traditional site-built homes and are often associated with rural areas and high-density clusters. Though close to mobile homes, these don’t move around much. Unlike motor homes, manufactured homes are not self-propelled vehicles containing housekeeping space inside them.

Manufactured homes are regulated by the United States Department of Housing and Urban Development, via the Federal National Manufactured Housing Construction and Safety Standards Act of 1974. Generally, they avoid the jurisdiction of local building authorities. It is this national regulation that has allowed several mobile home manufacturers to become national players, whereas by contrast, producers of modular homes have to abide by state and local building codes.

Getting home financing for manufactured homes is relatively tougher compared to getting finance for a traditional site constructed home. This is because financial institutions consider these loans risky, due to the tendency of manufactured homes to rapidly depreciate in value. The interest rates are usually higher and the terms are smaller.

The amount of finance you can obtain is based on the value of your home, your credit and your job history to name a few. However, most companies try to get you what you want or need. The interest rate that you will be offered for manufactured home finance is based on several factors. Some of these include your credit history, the amount of the requested loan, and the model year of the home.

You can also get home financing by providing your existing manufactured home as collateral. You can use the money for home improvements, debt consolidation or to take care of other expenses.

Manufactured Home Financing Not Affected By Mortgage Meltdown

In August of 2003 and January of 2004, FannieMae and FreddieMac changed the rules for loans on manufactured homes.

Up to that time, manufactured homes could be financed with Zero down payment and loose income verification guidelines. (Does this sound like some of the problems that led to the current crisis?)

When the guidlines changed, manufactured homes were required to have at least 5% down payment from the borrower. All income had to be verified using standard procedures. Most singlewide units were also disallowed.

These are very similar to the restrictions now being placed on loans for regular, site-built homes because of the highly publicized problems with the qualify of loans written during the last couple of years. The only difference is that these policy changes have been in affect for years if the property is a manufactured home.

Manufactured homes are an important part of the affordable housing stock in Arizona and many other states. Where the median price for site-built homes is around $250,000, manufactured homes enjoy an average price in the range of $85,000 to $160,000. That is a HUGE difference in affordability.

According to HUD, more than 344,000 Arizona families live in manufactured homes. Because of the policy changes made more than 4 years ago, the loans for these homes remain readily available. In other words, “No Meltdown Here!”.

Real estate agents that are hurting for business should be learning about how to list and sell these homes. All the $400,000 listings in the world don’t do any good if no one can qualify for a loan. Manufactured homes have earned consideration due to their affordability and the ready availability of mortgages for them.