Mobile home parks are popular and offer more flexibility in comparison to traditional homes which are quite expensive to acquire. They are often manufactured in factory assembly lines and placed on trailer chassis making them easier to move. Mostly referred to as “manufactured homes” since they are built-in factories and moved to a park or land of the owner.
Homeowners have the opportunity to fulfill their dreams via manufactured homes since it is relatively cheaper. The cost of making a mobile home is cheap and that reflects the selling price as well while the only recurring cost will be the lot rent. A traditional home that is a site built can be costly, from buying the land to home construction materials, all these could be overwhelming while operating on a budget salary.
Now, you have a job and somewhat feel like you want to do more and own a place of your own yet you don’t have that much, or rather got tired of apartments, what do you do? A mobile or manufactured home could be your escape route. However, for a first-time homebuyer, it can be a daunting experience to make the process happen smoothly.
Whether you are a first-time site homebuyer or not, this article will offer insights into how to buy a mobile home in a park.
How To Buy A Mobile Home In A Park
First things first, you want to buy a mobile or manufactured home but the real question is where do you find them, or rather how do you locate them?
● Do an online search
● Call them directly
● Visit mobile home dealers
Do an Online Search
Almost anything can be found online, with just a snap of a finger you can buy food online or find the nearest restaurant. Equally, you can do the same and check out the listings available and collect the contact while minding the zip code.
Reviews and ratings will make it easier to distinguish the best and pick the right mobile home. Sites such as MHVillage and MobileHomeParkStore could be helpful in your quest to find your next home. Keep an eye on several and make comparisons while you cross-check with your preferences.
Call them Directly
With a quick search online and collecting contacts, call them directly to inquire about home mobile homes and ask as many questions as you possibly can for clarity. Finding mobile home parks within your area wouldn’t be that hard with the presence of online listings on the sites mentioned above.
Visit Mobile Home Dealers
Physically visiting mobile home park dealers will offer you much more. You will get the first-hand experience and even a window to view some of the property on sale at the mobile home park while you ponder your options.
What You need to know About Parks Approval
Having the financial muscle to buy mobile homes in a park doesn’t mean you’ll be accepted wherever you want. There is a set of rules and regulations that govern the mobile home community, its property and its mobile homes; a due process is followed before being accepted by the community.
The Dos and Don’ts of the Community
Every community has its own set of rules and it will be wise to do your due diligence and understand them. For example, does the community allow pets around? If you are a pet lover, this will be your first concern, right?
Otherwise, you’ll find yourself at crossroads once moved in only to find out no pets are allowed. On such occasions, you will have two options, getting rid of your pet or moving out of the property which can be costly. Besides, it’ll be at your benefit if you make an early visit and establish if the place suits your taste.
Consent to Credit Cards and Information
Expect the park to ask about credit card details, a grave mistake would be unwilling to share the information. This will raise questions about you and certainly they are likely to conclude you’re hiding something from them. Cooperate and provide the needed details if you’re looking to join the park.
No one will gladly open their doors if they know nothing about you. It’s a common industry practice to do a background check. For safety purposes, the community will scrutinize your background and ensure you satisfy their set of profiles. For example, they’d want to know your previous living arrangements, and why you are moving? If you’re convincing enough, they are likely to accept you.
Besides, things like, when are you expecting to move in, will be laid a trap and definitely will expose you if you’re not careful. An answer like, “I’m moving in a week..” will only speak volumes about your organization. Communities expect individuals or households that are planned and responsible.
A word of mouth is never enough, ask for the lease agreement and go through it before consenting. Any future problems that arise will be easy to solve using a lease agreement as a reference.
It’s possible that the lease agreement out to be overwhelming, a lawyer would perfectly blend in and save you from the headache of such a process.
Fill the Application Form
Lastly, filling the application form will be an indication of an agreement with everything. Here, you’ll provide personal information like the credit card, employment history, and monthly income.
More so, you’ll provide authorization to contact employers, previous landlords, and check for any criminal records if any.
How To Finance Your Mobile Home
As mentioned earlier, mobile homes or manufactured homes are relatively cheaper than traditional real estate which is a site built. However, don’t be fooled that the cost is a walk in the park. To put it in numbers, mobile homes would cost anything between $50,000 and $ 100,000. Which is way above the amount anyone can fork out instantly without feeling a pinch.
Therefore, financial help would be necessary to execute your goal. Since mobile homes are non-traditional real estate, getting a suitable lender can be problematic. Traditional lenders won’t give you a mortgage. Sounds tough, right?
Well, there are other financing options you can adapt to and still achieve your goal of buying a mobile home. While these financial options exist below, expect to pay higher interest rates and a shorter repayment period, unlike the traditional mortgage where you’ll have a longer time.
● Personal loans
● FHA loan
● VA loan
● Rent to own
A personal loan is one option you may choose to finance your mobile homes. With a personal loan, you can use it for almost anything, it offers flexibility. However, the downside is, the interest rate is quite higher than other types of loans.
The upside is you won’t lose your home if you default, which is unlikely with other mortgage and auto loans available in the market. Besides, it takes a shorter time to complete the application, saving you the tedious process, unlike mortgage loans where often you have to provide collateral.
However, personal loans may not offer all the amount you need as often they tend to give a maximum of $25,000 to $50,000. If you happen to locate a personal loan that goes beyond that, good for you to jump in and buy your mobile home.
FHA is a government-backed loan that often has generous terms compared to other loans, however, under certain conditions. It lets the applicant finance the buying of a mobile home, or the lot which the mobile home sits on, or both.
However, the FHA program will look to certify the mobile home is the primary residence of the homeowner before consenting to loan the borrower. Something to keep in mind is that FHA doesn’t issue loans, rather, it insures as a way to encourage mortgage lenders to give more loans.
So where exactly do you get the money if FHA doesn’t lend? Well, you have to find a financial institution that is FHA-approved, let’s say a bank.
For veterans, a VA loan would be a go-to type of loan if you’re looking to finance your mobile home or even the land. The department of Veterans affairs often insures loans for those belonging to the military community.
The best thing about the VA loan is that you are likely to get 100% financing of the loan you need for a manufactured home with a repayment period of 20 years upwards depending on the type of manufactured home you choose.
For instance, the VA loans will offer you a repayment period of up to 25 years for a double wide manufactured home, and the lot. Whereas you’ll get a repayment term of up to 20 years for a single wides manufactured home.
In case you own a manufactured home already and you need a lot, the VA loan will offer you 15 years of the repayment period.
Rent To Own
Rent to own option is where you agree with the park owner to offer you the mobile home and pay a down-payment and a higher rent monthly with a promise of paying a lump sum in the future to clear the debt and own the mobile home. This mode of financing is also viable.
It’s a viable option if for some reason you can’t get loans from other lenders.
Tips To Use for Getting Mobile Home Financing
While many lenders may be available in the market to offer financial assistance for your mobile home needs, you on the other part have to meet the minimum threshold to get approved.
Keep an Eye on Credit Score Reports
The first thing a lender will run to check is your credit score. If the score is good the better for you as you are likely to get the loan approved fast. The upside of a good credit score is a lower interest rate which can save you some bucks in the end when buying a mobile home.
Compare the Financial Options
With an open market, it should be recorded in your mind that the interest rates will vary. Therefore, making comparisons will help you choose a lender with better terms. Isn’t it worth it to toil researching instead of blindly picking a lender without any further scrutiny?
Make a Choice of Whether the Land will be part of your Plan
You’re likely to get approved by a financial institution if you own the land and mobile home. The land cements the stability of the asset as it will be unlikely to pick up and leave. Besides, lenders have different criteria, check out if their loan instrument is likely to finance both buying a mobile home and land.
Review your Loan Application
You’d want to make sure every detail in it is correct and factual. Taking a bit of time to go through every step will do you no harm. Transparency is key as many lenders will want to know they are dealing with a trustworthy client.
Benefits of Buying a Mobile Home
You Won’t Break the Bank
The construction cost of a house can be overwhelming if you have a small income stream. However, you can still live a good life, a place of your own if you choose to buy a mobile home and live on a budget.
Unlike construction where tons of legal procedures have to be fulfilled, a mobile home is relatively easier to acquire with few details needed to complete the purchase.
A report by the Manufactured Housing Institute indicates that mobile homes are constructed in a way that yields up to 90% less waste than a built home. This mode of home building is eco-friendly compared to traditional real estate.
Ability to Live More Simply
With a home mobile to live in whether single wide or double wide, it also means low-cost maintenance. You wouldn’t need landscaping like at your traditional house. Less cost means less stress and eventually more happiness and time to do what you love.
Scientifically, it has been proven that the attitude of “less is more” improves the mental well-being of those who live simply.
Safe and Quality Controlled
While many might assume buying a new mobile home is wrong since it’s vulnerable to weather, the truth is it’s quality-controlled since the site is inspected and thus able to get through weather harsh conditions. For a record, the term mobile home refers to built homes before 1976, while those built afterward are referred to as manufactured homes. It’s because around this time that the US Department of Housing and Urban Development made some quality standards changes.
The Downside of Buying a Mobile Home
While buying a mobile home is a good choice, there’s also some downside to it.
Limited Choices in Design
Unlike traditional homes where you have unlimited options on designs and layouts, buying manufactured homes offers you little choice when it comes to designs. This is often down to the fact it’s mass-produced in a factory.
Customization will be a lot harder and you might be forced to go with what is available. Either single wide or double wide
Depreciation Over Time
Land site value appreciates over time, one advantage for a homeowner with the traditional home. You on the other side owning a mobile home is disadvantaged since even reselling won’t recoup the buying amount spent on it.
Hard to Resell
It’s a lot easier to resell a traditional home than a used mobile home and get the value of money. The fact it depreciates over time makes it vulnerable to price the second time in the market. If a buyer needs to relocate the used mobile home, it means extra cost on their budget which might shift their mind to buying a new mobile home.
Since the manufactured home isn’t tied to the land site, it is considered a non-real estate asset and thus traditional financial institutions won’t offer you the loan to finance the buying. It’s rather categorized as personal property since you pay the lot rent. Thus, financing options will be limited for you.
If you do get a loan, then the terms are likely to be a little different from normal mortgages, such as higher interest rates and shorter repayment terms.