Today, many young home buyers are seriously thinking about manufactured homes either because they are having a tough time paying their student loans and cannot afford regular houses, or because they want to downsize to a smaller home. Irrespective of what their reason is, there is an increase in the sales of manufactured homes.
Buying a manufactured home is considerably different from buying a regular house because when it comes to applying for a manufactured home loan, you realize that they are not even considered property, which means that you need to take a personal loan to finance one.
For those who are looking for financing options for their new manufactured home, here are four things that you need to know:
From whom should you borrow money for your manufactured home?
- There are various ways in which you can finance your manufactured home. The best thing to do is to research about all your possible options, do a comparative study of the interest rates, benefits, closing costs, and then choose a manufactured home loan option that suits your needs the best.
- Once you have decided on the type of manufactured home loan that you want to take, you should choose your borrower accordingly.
- One of the easiest ways to finance your manufactured home is to borrow money from the retailer who is selling the manufactured home.
- Beside the retailers, you can also take a loan from specialized lenders who have been financing manufactured home buyers for several years and are a pro at it.
Do standard mortgage lenders finance manufactured homes?
- If the manufactured home is on a permanent foundation system and you are planning to own both the land and the house, then you can get a loan from the standard mortgage lenders.
- The standard mortgage lenders are the local banks, credit unions, and mortgage brokers.
- Make sure that you apply for a loan at a trustworthy local bank or from a reputed mortgage lender, as borrowing a loan is a huge financial decision that you should do the right way.
What are chattel loans?
- A chattel loan is a manufactured home loan for buying a new manufactured house. However, you need to understand that it is a home-only loan which means that it won’t finance the land that you want to buy.
- So, if you already own land and wish to build a manufactured home on it, then this is the best manufactured home loan option that you can consider.
- One of the main advantages of opting for a chattel loan is that it has a lower processing fee as compared to a real estate loan. Another reason why many people are opting for this manufactured home loan is that it gets processed quickly as compared to a real estate loan.
- Keep in mind that chattel loans have a much higher interest rate as compared to a real estate loan.
What must you know before you take a manufactured home loan?
- Various factors determine whether you will get a loan for your manufactured home easily or if you will have to slog and run behind the lenders for months before they pass your application.
- One of the most important things is your credit score. It becomes easier to get a loan if you have a decent, if not excellent, credit score.
- Another important determining factor is the type of the home you’re buying. Lenders readily give loans for modular homes but not for manufactured homes. Not just that, lenders might act pricey when it comes to lending money for single-wide mobile homes but will easily give you funds for building double-wide mobile homes.
Just keep in mind that other than the cost of the house, you will also spend money to buy the land, pay shipping charges for the manufactured home, and pay off other bills. So, map out all the possible expenses that you will incur and choose a financing option that will suit your needs the best
Tag: manufactured home loans