Financing a manufactured home purchase is a common way to secure funding for your new home. However, it’s important to do your research before you start the process to avoid making common mobile home financing mistakes.
Thankfully, the MHVillager is here to help. Here are some of the top mistakes homebuyers make when financing a mobile home:
Going With The Wrong Lender
When you start the process, you may find financing from a few different sources. Some common places to obtain a loan for your home are through a community, through a local dealer, or through a lender that you find on your own.
No matter how you finance your mobile home, it’s important to find a lender that’s proactive in communication and readily available to you. If a lender hasn’t returned your calls in a while or isn’t transparent about the process, then they may not be a good fit.
Getting The Wrong Type of Loan
There are several types of loans for manufactured homes. Each loan is different in many factors, including who administers the loan and whether the land is included, among other factors.
Your lender should advise you on which type of loan is best for you. However, do your research to understand the pros and cons of different manufactured home loans. Otherwise, you may risk wasting time applying for a loan that isn’t a good fit.
For example, a chattel loan is the most popular type of loan for manufactured homes. One drawback is that chattel loans sometimes come with higher interest rates. This is because the home itself may often be used as collateral when securing the loan.
It’s important to remember that not all home loans are exclusive to manufactured housing. Some government loan programs also fund site-built homes. Meanwhile, other loans only fund those kinds of homes. Check with your lender if you’re not sure if a certain type of loan is right for your mobile home purchase.
Buying a Home That Isn’t Properly Valued
This is a particularly big mistake that you don’t want to make. When buying a manufactured home, it will often be appraised to be worth a specific value.
You should always ensure that a home is properly valued before proceeding with financing. This is especially important for pre-owned manufactured homes.
Homes sold in communities will be pre-appraised. This is also the case for homes sold through dealers. If you buy a new manufactured home before it’s been sited, it may have a sticker price tag in place of an appraised value.
If a mobile home isn’t properly valued, you risk not being able to have your loan underwritten. This is because lenders will require a valuation before funding a deal. If the appraisal comes back too low, they will not underwrite the loan.
taking out a loan that doesn’t match the true value of the home.
The good news is that a seller is inclined to sell their home as fast as possible. This means that they’ll often ensure a home is properly valued before it’s listed. However, it’s best to ensure that this is the case before pursuing a mobile home you’d like to buy.
If you’re ready to buy a mobile home, head over to MHVillage to browse for thousands of mobile homes on sale.