In today’s market, if you want to purchase a home, the easiest way to start is finding a mobile, or manufactured home. These homes are pre-built in a factory and then can be moved to any site the owner has chosen for it to be setup on. Due to the way they are constructed, mobile homes can be a lot less expensive than building or buying a foundation home. Before making your decision to go this direction, there are several important facts about mobile home mortgages that buyers should be aware of.
Most of the time, if you purchase a mobile home, there’s little chance that the home itself will be considered sufficient collateral for the loan. This is due to the fact that manufactured homes depreciate in a similar way as automobiles. After a period of 5 to 10 years, the value of the home is nearly zero under normal conditions.
For this reason, it is normally necessary to include at least one acre of land with the mobile home as collateral. Once the home is tied to the land, its value stops depreciating and it becomes as valuable as any similarly constructed home.
And the upside is that finding lenders for mobile home mortgages is not as hard as it is to find traditional home mortgage lenders! This is because most mobile home manufacturers also operate their own lenders in order to facilitate sales. These lenders will often work with individuals with bad credit as long as it is not at the very bottom of the scoring scale.
In order to get a mobile home mortgage, it’s usually necessary to remove the wheels and axles when the home is set up so that it is connected to the ground in a way that makes it a stationery object. By doing so, it’s more difficult for homeowners to choose to relocate the home from the designated area, and it is less likely for them to default on the loan since they’d lose both the mobile home and the land connected to it.
The good news concerning mobile home mortgage loans is that they are usually negotiated for thirty year terms, much like a traditional mortgage. Because the cost of the mobile home is usually less than a foundation home with equal square footage and similar floor plan, the payments are considerably less each month when paying on a mobile home.
It’s also important to know that most of the newer mobile homes are a much higher quality of construction than they were years back. In fact, energy efficiency is one of the biggest selling points that are advertised by companies selling mobile homes today. Most of the time, newer mobile homes have better energy efficiency than similar foundation homes unless the builder makes a special effort to include energy efficient ammenities.
The fact that you will have much lower energy bills will be considered when a person is being qualified for a mobile home mortgage. Since decreased energy bills usually make it easier to make payments on time, this usually works out in favor of the client.
Arnold writes about subjects like buy to let remortgages and buy to let remortgages on her blog.