Mobile Home Mortgage Facts
Mobile homes, also known as manufactured homes, are one of the simplest ways for people to buy a home. These homes are pre-constructed in a factory and can be moved to whatever site the owner chooses for setting up and preparing to live in. 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.
When one purchases a mobile home, there is little chance that the home itself will be judged sufficient collateral to back the loan. This happens because manufactured homes tend to depreciate in value in the same way that automobiles depreciate. Typically, the home doesn’t have any value after 5 to 10 years.
For this reason, it is normally necessary to include at least one acre of land with the mobile home as collateral. After the home is connected to the land, it will stop losing value, and will become as valuable as any other home.
It’s easier to locate lenders for mobile home mortgage than it is for a traditional home mortgage. This is due to the fact that most mobile home manufacturers mange their own lenders to facilitate sales as well. These lenders are often willing to work with individuals with less that perfect credit as long as their credit score is not at the bottom of the scale.
One of the main requirements for most mobile home mortgage loans is the axles and wheels be taken away when the home is set on site, and that it be attached to the ground in such a way that it ends up making it one complete unit. In this manner, lenders make it more difficult for homeowners to decide to move the home from the location chosen and make it less likely that they will default on the loan because they lose not only the mobile home, but the land it sits on as well.
One of the good things about mobile home mortgage loans is that they usually last for a duration of thirty years, similar to a traditional mortgage. Due to the fact that the cost of a manufactured home is a lot less than a foundation home with a similar floor plan and equal square footage, the mortgage payments for a mobile home are considerably less each month.
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. One of the biggest advantages advertised by companies trying to sell mobile homes is that they are very energy efficient. 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 resulting lower energy bills will be taken into account when determining if a person will qualify for a mobile home mortgage. This normally works in favor of the customer because the lower energy bills translate into more ability to make payments in a timely manner.
Arnold writes about subjects like buy to let remortgages and buy to let remortgages on her blog.