If you’re looking to purchase a manufactured home, or you already own one and would like to refinance, here are some things to keep in mind.
Tips to get a Loan for your Manufactured House
Manufactured homes are not the same thing as modular homes. Manufactured homes are constructed, purchased at a dealer, and then moved to their final destination where they are permanently attached to the earth. If you’re thinking about buying a manufactured home, many mortgage lenders will deny you because it’s a risky financing vehicle. The reason is , the fact that, technically, you could potentially detach the dwelling and move it to an alternative property.
If you are able to secure financing, manufactured home loans often contain higher fees and rates as a result of associated risk that comes with this type of property. Some lenders will allow you to secure financing for a manufactured home without having to use mortgage insurance, meaning you can avoid a Federal Housing Administration mortgage, which contains a monthly mortgage insurance payment and can end up costing you more. An FHA mortgage is definitely an alternative for you, however, if you have no alternatives.
Conventional Mortgages
To get a conventional mortgage without mortgage insurance, you need to have at least 20% as a down payment (or in equity if you’re refinancing) and have a credit score of 640 or higher. It can be used for purchasing or refinancing without pulling cash out under certain circumstances, however, you should speak with your mortgage lender about the requirements specific to manufactured homes before assuming the home will be eligible for a a conventional mortgage.
If you are looking to purchase a manufactured home for the first time, conventional mortgages will help you to accomplish that sort of financing so long as you find a property with the real estate included. To put it differently, the house is already affixed to the earth and it’s being sold as real estate. Financing to secure the land and attach the unit is an entirely different animal that typically includes higher fees and rates. These loans tend to be more tough to come by. If you are looking to get a manufactured home, get pre-approved to purchase a home with the expectation that the manufactured home is already attached to the real estate and is going to be sold as one property. This will give you the greatest outcome for success in this particular kind of property arena.
FHA Mortgages
Another outlet for this type of financing is FHA. FHA contains two forms of mortgage insurance; an upfront mortgage insurance fee as well as a monthly mortgage insurance payment that is otherwise avoided when you go with a conventional mortgage. No matter what your financial situation is, take a look at getting qualified for both types of financing. It is beneficial to know that if you’re able to use conventional financing and avoid PMI, you will have an easier time handling the payment. The payment will be lower which can enhance your buying power while you remain under the 20% equity margins.
Remember, before you begin the mortgage lending process – or even start your quest for a new home – it’s recommended that you check your credit scores to see where you stand. Doing so will tell you exactly how much loan you’ll qualify for along with what terms are going to be related to that loan. Also, it’s the best time to pull your credit reports to make certain there aren’t any mistakes, which could hurt your capacity to get the best loan terms. You can get your two free credit scores, updated every Two weeks, at Credit.com.
So if you are considering purchasing a manufactured home, you may want to call us, since we have assisted several of our clients in purchasing their new home here in the Tampa Bay area. We are always just a click here or call to 813-300-7116 away.
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