Compared to the process of purchasing a traditional house, it’s a quite different experience buying a mobile home or manufactured home. For one thing, the lot the home is on – and who owns it – provides a distinct difference. Financing is another source of variation between the two.
As first-time manufactured home investors, because money matters, you should gather as much information about the process as possible. Here, we will discuss some of the finer points of being a first-time manufactured home investor.
Real Estate Rental or Ownership
One of the most important things you’ll need to consider is whether you’re going to rent or own the real estate where your home is placed. You will purchase the home only after you’ve completed the real estate investment.
Depending on location, for most manufactured home purchases, package deals are available. You may be able to work out a deal where the mortgage pays for both the private land the home is on and for the home itself. Owners of manufactured residences can, in many urban areas, rent strategically located lots in mobile home parks.
Space Considerations and Home Types
Double wide and single wide manufactured homes are the two most common types. Rarer to find, but offering more interior room, are triple wide manufactured or mobile homes.
Unlike a traditional home, a space efficient manufactured home has rooms already connected with a hallway separating them from one another. Approximately two single wide units would comprise a double wide mobile home, to give you an idea of size. That would be comparable to the size of a traditional single-family house.
Manufactured Home Financing Requirements
Mobile home loans aren’t offered by a lot of standard lending institutions. Rather, mobile home sales companies or credit unions provide most manufactured home financing. The older the home is that you are purchasing, the more difficult you may have finding a lender.
Certain stipulations apply if you’re looking for a government-backed loan with which to purchase a manufactured home.
There is, however, one thing that both traditional homes and manufactured homes have in common when it comes time to purchase: A home inspection will likely be required by the lender before a loan can be approved.
There may be some risks to consider even if you have worked out a very affordable price for your manufactured home. Up to 100% financing may be allowed for mortgages taken out on housing of this type. If it falls under the USDA Rural Development Program, this is particularly true. You might have to contend with higher interest rates, however, for manufactured home loans because they are identified as being higher risk.
Why? Unforeseen events such as theft/loss, natural disasters, fire, etc. serve as buffers. That could mean, on top of the loan, the institution lending you the money will require mobile home insurance.
Matters of Money
When it comes to owning a home, one budget friendly option is that of manufactured homes and/or mobile homes. The space upon which a purchased home sits can be rented rather than purchased. Compared to a regular single-family home, for a manufactured home, down payment rates are usually lower.
Are You a First-Time Manufactured Home Buyer?
Whether you are interested in purchasing or building your own manufactured home, Michigan Home Zone is who you should partner with. With our experience and expertise, we will be invaluable throughout the entire process.
It’s time to make your dream home a reality with one of today’s new manufactured homes. Please contact us to build the manufactured home of your dreams today.