5 Things you May not Know about Financing Manufactured Homes
Buying a manufactured home for sale near your location is a cost-effective approach. Manufactured homes are prefabricated, built inside a climate-controlled factory, and they are then transported to the building site of the homeowner to complete the finishing works. Manufactured homes have become widely popular among many prospective homebuyers because of their affordability factor.
Most homebuyers in the country claim that getting a manufactured home financing is an impossible task. It is a fact that acquiring a manufactured home financing is no easy task, but it is not impossible either. If you are planning to apply for a manufactured home financing, then you should know a few things before doing so.
Traditional Financing for Manufactured Homes
Some of the banks and financial institutions in the country do not offer traditional financing for mobile and manufactured homes. However, if you are planning to buy the manufactured home and the land it is located on, then getting a traditional financing will not be a problem. Trying to secure a chattel loan would be your best bet if you are planning to buy just the house.
Most of the manufactured home loans offered by financing institutions usually have shorter terms. This means that you might not be able to finance a manufactured home for 30 years although this is possible in the case of conventional site-built homes. The typical repayment period of a chattel loan is 15 to 20 years.
The 15-Year Rule
It is true that the financing rules for both mobile and manufactured homes significantly vary from one bank to another. Some lenders follow a 15-year rule and according to this rule, manufactured homes above the age of 15 years do not qualify for financing. If you encounter this situation, do not be upset because plenty of other options are available to you.
Low Down Payment Option
The usual down payment for manufactured home financing lies between 5 to 20 percent, no matter whether you acquire a chattel loan or a mortgage loan. However, the bright side is that you will be able to buy a manufactured home for less cash.
Many prospective homebuyers believe that all manufactured home loans have a higher interest rate. This is true only for some specific manufactured home loans, and all others have a reasonable interest rate. If you have a good credit score, then you will be able to get a manufactured home loan with a lower interest rate.