Financing Tips for Manufactured Home And Modular Home Purchasers

With historically low interest rates, more home purchasers are seeking helpful manufactured home financing information.

During their inception, manufactured homes were called “mobile homes” and were considered an unconventional and temporary housing option. Yet, as time have changed, so have the perspectives regarding this residential option. Manufactured homes and modular homes have now become a popular choice of American homeowners as permanent quality affordable housing that is at least equal, or in some instances, superior to a typical site built home.

How manufactured homes are sited and installed determines type of financing available.

There are two types of situations manufactured home buyers should understand before beginning their research. If you are purchasing a manufactured home to have installed on rented property, the home is considered personal property. But if the manufactured home is to be installed and attached to property you own, it may be considered as real property. Modular homes produced by manufactured home manufacturers are built to a residential building code and designed to be attached to real property and thus are considered real property and are financed same as site built homes.

There is also situations in which a loan includes the land, site preparation and manufactured home purchase and yet the home is not permanently attached to the property. Each situation calls for a different financing option, so it is important to include information and cost of the entire installment plan when seeking lenders.

Researching loan types and lenders

As with any other buying decision, it is important to research and shop around looking for a mortgage company that understands your situation, specializes in manufactured home financing, and will understand the type of loan that satisfies all the needs of your situation.

We suggest your research begin at where you can review all the loan programs available and how they work for your particular situation. You will also find here a directory of lenders who are specialists in all types of manufactured home lending.

Here are some of the key questions to ask before beginning the loan application process:

  • What type of loan do you qualify for? Will it be a traditional mortgage, a construction loan, “end” loan or a home only loan?
  • What are the advantages and disadvantages of each of the loan options you qualify for?
  • If you choose an end loan, how long will it take for retailer and contractors working on the project to receive their payments?
  • During the manufactured home financing process, does the lender work in conjunction with the funding requirements of the manufactured home retailer?

Follow through with your research direct with chosen lender

Once you have found a lender you are comfortable with and will meet the coordination criteria of your retailer, ask a lot of questions.The lender should explain how many years you’ll be paying on the loan. He/she should explain the interest rate and whether it’s fixed or variable. In addition the lender should discuss your credit report with you. The information found on your credit report provides the lender with insight into your credit history and determines the interest rate.

You will want and need to know upfront what fees, premiums and closing costs will be due at closing, including any remaining balance due on the agreed upon down payment with the retailer.

Photo by BrianAJackson on Getty Images

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