Financial Terms in Manufactured Home Lending

Prefab Modular Homes
Manufactured Home Lending

If you have bought a home with lump sum payment, you may not require the finance to cover the expenses. The need to finance is more as the green homebuilders protect the habitat with energy-efficient modules and make the manufactured home ‘bank-able’.

Unlike modular homes, the mobile home modules are fully assembled from a controlled factory and towed to the building site. The manufactured homes for sale would have a vehicle identification number as well as they can be moved from a place to another. Given below are details regarding financing a mobile home, their classifications, and other lending norms.

Mobile Home Considered as Personal Property

Registered under the vehicles department and towed on wheels, mobile homes are considered as a personal property. As said, most of the types of mobile homes can be moved from one place to the other thereby requiring a secured loan. Some lenders provide the secured loans instead of the conventional mortgage to protect the buyer interests. The conventional mortgage incurs an interest rate that is pre-fixed and cannot be changed. However, the mortgage is an excellent deal when a local moneylender hesitates to lend money.

Financing Manufactured Home with Land

Such type of financing is termed under the real estate classification and not a personal property. In fact, some lenders do provide a secondary mortgage with higher interest rates making sourcing finance a risky business. In fact, acquiring the property and placing the manufactured homes for sale may invite minor risks apart from the financial risk. If such a proposal pushes through, then the home cum property is considered as a single lot in real estate.

The FHA Conventional Mortgage

Another way to finance a manufactured home is to approach the Federal Housing and Administration for a mortgage. The FHA mortgage entails monthly installments and can be taken alongside the FHA insurance. To get an FHA mortgage minus insurance a 20 percent down payment mandates and so do credit score of 640 or more.

Do make it a point to ensure a good credit score before investing in manufactured homes for sale alongside the land. Doing so would let you know exactly where you stand in terms of credit worthiness and repayment ability. Besides, detailed planning would increase the chances for you bagging an energy-efficient mobile home.