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When it comes to buying a home, most people automatically assume they need a “traditional” mortgage product or loan. However, many people don't realize that manufactured homes can offer just as much value and ownership opportunities—you just need the right financing product. Unfortunately, there are still a lot of misconceptions out there about manufactured home mortgages and what they entail. In this article, we are going to set the record straight on five of the most common misunderstandings surrounding these types of loans. Read on to learn more and discover if this form of financing could be right for you!
Misconceptions About Manufactured Home Mortgages
When it comes to manufactured home mortgages, a lot of misconceptions and myths exist that can keep you from getting the financing you need and deserve. Misinformed or outdated information can prevent potential borrowers from applying for a loan on a manufactured home, so it’s important to understand what is true and what isn’t.
Here are 5 of the most common misconceptions about manufactured home mortgages:
Misconception 1: It is difficult to qualify for a manufactured home mortgage.
This misconception is based on older rules and regulations surrounding qualifications for loans on mobile homes that were put in place before stricter standards became the norm. Today, lenders have much more stringent requirements when providing financing options for pre-owned and new manufactured homes. In fact, the process of qualifying for a manufactured home mortgage is similar to that of a traditional loan.
Misconception 2: Manufactured homes don’t qualify for standard mortgages.
It is a common misconception that manufactured homes don’t qualify for standard mortgages. This isn't true - in fact, there are several different types of mortgages available to buyers of manufactured homes. Many lenders offer FHA loans and VA loans which can be used for purchasing a new manufactured home or refinancing an existing one. In addition, some lenders may also offer traditional mortgage options such as conventional fixed-rate or adjustable-rate mortgages (ARMs). Depending on the loan terms and your credit score, you may qualify for lower interest rates and more flexible repayment plans on these loans.
Another benefit of taking out a mortgage for a manufactured home is that it can help you build equity more quickly than with other types of financing options. As you make payments on your loan, the balance of the loan is reduced, and your home’s equity increases. This can be beneficial if you plan to resell or refinance in the future.
Misconception 3: Insuring a manufactured home is too expensive.
Another common misconception about manufactured home mortgages is that insuring them is too expensive. However, this couldn’t be further from the truth. In fact, most manufactured homes are insured at rates comparable to traditional single-family residences. There are various factors that affect the cost of insurance for your manufactured homes, such as the age of the home and its location, but you can expect to pay similar premiums as you would with any other type of home. For an accurate assessment of what your coverage will cost, it’s best to speak with an insurance professional who specializes in manufactured homes. They can help you find the right policy that fits your needs and budget.
It’s also important to remember that if you are financing your home, the lender will likely require you to have insurance as part of your loan agreement. This is to protect their investment in case anything happens to the property. Securing affordable coverage for your manufactured home can help give you peace of mind knowing that it’s protected from unexpected damages or losses.
Misconception 4: You can’t get a mortgage on an older home.
While some lenders may be more hesitant to provide financing for homes that are over 10 years old, there are still options available to qualify for a loan even if your home is not brand new. Many central banks and credit unions offer competitive rates and terms for manufactured homeowners of any age. In addition, there are specialized lenders who specialize in financing older homes. It is important to research your options and find the best possible lender for your situation. And don’t forget to shop around - you may be able to get a better rate from one company over another!
Misconception 5: There's no way to get a mortgage with bad credit.
This simply isn't true. While there are certain restrictions in place for those with lower credit scores, most lenders offer some options to help borrowers finance their manufactured home. There are also steps that can be taken to help improve your credit score and make you a more attractive candidate for a manufactured home mortgage loan.
- Try talking to your lender about what type of loans they may offer for those with bad credit. They may offer special financing programs that could fit your needs better than traditional mortgages. It's important to note that even if your credit is less than perfect, lenders will still look at other factors such as income, assets, and employment history when making their decision on granting the loan.
- Take steps to improve your credit score. This includes making payments on time and considering a secured credit card to rebuild your credit over time. It's also important to check your credit report for any errors or inaccuracies that could be dragging down your score. Finally, consult with financial advisors and lenders to see what other steps you can take to make yourself an attractive loan applicant.
The bottom line
Don’t let outdated or false information keep you from getting the loan you need! Misconceptions about manufactured home mortgages can be easily debunked with just a bit of research and understanding. With the right knowledge, you can confidently secure financing to move forward in your journey toward homeownership.
Do You Need a Loan for Your Next Mobile Home?
World Premier Realty specializes in California Mobile & Manufactured Home Loans and Northern California real estate sales. We finance Mobile Homes In-Park and On-Land. For more than 20 years our team of real estate agents has upheld an ongoing commitment to providing an elevated level of personal service for clients wishing to buy and sell residential properties throughout the San Francisco Bay Area. Our clients come first, and as a result, they can achieve more than they ever dreamed of with their real estate investment. When it comes to your next move, we want you to experience the difference exceptional real estate service can make. Contact us today, for free real estate advice, to find your nearest sales associate or to find your dream home!