If you are in the market for a manufactured home or you currently own one and are looking to refinance, there are some things you need to know.
A manufactured home is not a modular home. Manufactured homes are built, purchased from a dealer and then moved to the property on which you want to live. Getting a mortgage for these homes can be difficult due to the fact that lenders will consider this a risky loan because you could detach the dwelling and move it to a different property.
That is why these loans often have higher interest rates and fees attached. You might be able to still find lenders that do not require mortgage insurance which means you can avoid a Federal Housing Administration mortgage and save some money each month.
Here are the some of the mortgages you could seek out:
If you are looking to get a conventional mortgage without mortgage insurance you will need a minimum of 20% as a down payment (or if you are refinancing, 20% in equity) as well as have a credit score of 640 or higher.
It is important that you discuss the ins and outs of manufactured home mortgages with your potential lender. They will be able to tell you the exact requirements they have when it comes to manufactured homes and mortgages.
Chances are you will need to find a property that is already attached to real estate in order to get a conventional mortgage. This is the easiest way to get a mortgage for a manufactured home. If you are going to buy the home separately you will be up against much higher rates and fees.
If you are set on buying a manufactured home, try to get pre-approved to buy the home with the expectation that the home is already attached to the real estate it will sit on. If they are being sold as one property you have a better shot at getting this type of mortgage.
Another option for manufactured home mortgages is the FHA. This type of loan will require that you buy insurance each month.
FHA has two different forms of mortgage insurance. An upfront insurance fee followed by monthly insurance payments. This is different than with a conventional mortgage. You will not need a 20% down payment, but it could still end up costing you more.
If you can avoid having to pay mortgage insurance it can save you a lot of money over the life of the loan. The monthly payments will be easier to meet without the insurance and for most people this is vitally important.
It is recommended that you try to get qualified for both types of mortgages, this will allow you to compare your options and make the right decision for you and your bank account.
Just remember that before you start the lending process you need to understand your credit score and where you stand financially. This will help you to determine what type of loan you will qualify for and what the terms may be.