10 Tips for Financing a Mobile or Manufactured Home

Mobile, manufactured & prefabricated homes are an ideal option for homeowners who are looking for affordability, modern amenities & luxuries – at an incredible price! The term “mobile home” is still used to refer to a wide range of housing options, however, these single, double, and triple-wide prefabricated homes are now called manufactured homes, varying between 1000 to 3000 sq. mts. of space. 

Mobile homes are easily accessible at competitive prices, with luxuries beyond what a standard home could provide within the same price range. With the right knowledge, skills, and tools at your disposal, you can add any luxuries you may want, within the space you have. 

1. Financing your property

Financing a new property/home can be an extremely challenging task -especially for a first-time homeowner. It is a fiscal responsibility that goes beyond financing and loans. You will have to budget for additional costs and expenses as well, such as property taxes, insurance, lease costs, damages & repairs, and more. Financing a mobile/manufactured home is totally different from that of a standard home loan. The reason for this is that loans for mobile/manufactured homes are limited to the home as an entity, separate from the land. So you will in effect have to pay the landowner a fixed leasing cost that enables you to put your home on their land. 

With interest rates on the rise, now is the best time to invest in mobile/manufactured homes, since you will almost certainly find favorable financing options. Take note of the following steps, and don’t let a simple activity become an utter hassle in your life!

2. Prepare your documents

This may seem simple, but remember to make a list ahead of time, with every document you may need. Double-check the list before you set out to find financing for your house and ask ahead for a list of documents the financers would like. If you don’t have some required documents, apply for them in advance, or find a financier who doesn’t need those documents, in case you cannot get them.

3. Check your credit score

Once you have all your documentation in order, check your credit score You won’t be able to get the loan you require with a poor credit score. You may have to find ways to rectify your credit score before you can even think of applying for most methods of financing. If your credit score is poor, sit down with your credit report, go through it, and identify the best ways to boost your ratings. 

4. Explore the types of loans available for you

There are several loans and programs available to people who need financing for a mobile home. Chattel loans and personal loans are the two most common types of loans on the market for mobile/manufactured home financing. 

Chattel loans are generally only available to properties that can be moved. Personal loans, on the other hand, can be used for any and all personal financing reasons. The loan amount you can get on a personal loan generally depends on how much regular income you make. 

In addition, if you choose to go with a non-standard loan, make sure you learn the terminology associated with these loans like balloon payment, variable rate, or teaser rate.

5. Inquire with different lenders

Once you have explored the various loans available to you, it’s time to start shopping around for the best lender for your budget and situation. Compare their processes, long-term strategies, interest rates, down payment allocation, personal help, successful previous financial partnerships, and more.

Lenders will also be able to help you with insurance since they can connect you to national insurance companies that specialize in mobile home insurance. Also keep in mind that it’s okay to shop around, compare different lenders, and choose the best fit for you! 

6. Save some for an additional cost

Always leave extra space in your budget before investing any of your money. You need to be able to budget in a way that you have enough left over to help pay for any sudden emergencies like weather damage. You also need to be able to pay for furniture, insurance, taxes, bills, remodeling, and more. So always keep this in mind while budgeting. 

7. Put Down A Heavy Down Payment 

When you are making your plans for financing, always account for the total lump sum that you will be able to pay upfront for the home.  In general, if you are buying a manufactured home, drop as much money as possible into the down payment – this helps you build up equity while reducing your monthly payments. 

8. Be smart and don’t get pushed around 

Here are a few quick things to be smart about: 

• When a lender quotes a payment for your new loan, ask if it includes taxes and insurance
• Don’t let your lender bully you about credit life insurance. Not only do you not need it, but also you may already have enough life and short-term disability insurance.
• Speaking of which, don’t let your homeowner’s insurance policy lapse. You will likely have to pay a higher premium, after waiting months on end to get it reinstated, if ever. 

9. Think about taxes ahead of time!  

The interest accrued on mobile/manufactured home loans is generally tax deductible. If the home is your primary place of residence, you will get a tax break, the same as you would for real estate. Also, remember that it is also extremely important to consider escrow (taxes & insurance) in your monthly payments. Speak to a tax advisor, and make sure you have all your tax details in order. 

10. Make your payments on time! 

Making your payments on time seems like a simple enough task, however, if you don’t plan ahead, you may fall short sometimes. This can affect your credit score, and any future investments you may make. Pay all your bills automatically if you can, so that you never forget to do so.