Manufactured Home Finance Options
If you are feeling overwhelmed by the large amount of different manufactured home finance options then you are not alone. Deciding which choice will work best for your financial situation takes some time, patience, and research. There are advantages and disadvantages to any loan so it is a good idea to compare them carefully.
The first choice any prospective home buyer will encounter is deciding between a fixed rate mortgage and a variable/adjustable rate mortgage (ARM). A fixed rate is just what it says it is; the interest rate is fixed for the life of the loan resulting in monthly payments that stay the same. An ARM has an adjustable interest rate that will adjust at pre-determined time periods. This can result in monthly payments that go up or down depending on current interest rates at the time of adjustment.
The next thing manufactured home buyers need to consider is the length or term of the loan. The most common terms are 15, 25, and 30 year mortgages. In some instances lenders will also offer 40 and 50 year terms. The thing to keep in mind when considering the length of any mortgage is that the longer the term the lower the payment but the more interest will be paid over the life of the loan.
There are also what are called FHA and VA loans to consider. Each offers certain advantages.
First time home buyers are often attracted to FHA loans because of its lower down payment requirements; sometimes only 3% of the total cost of the home. There are qualification requirements that must be met in order to get an FHA loan. A good credit history and proof of income to cover the loan payments and other financial obligations need must be shown. Your mortgage payment, home insurance, and property taxes must not be more than 29% of your monthly income. All other debts plus your housing costs should not be more then 41% of your gross monthly income.
Veterans of the United States military can take advantage of VA (Veterans Administration) loans when purchasing a new manufactured home. A VA loan does require a 2% one time fee payment when the loan is closed but it will also include the option of financing 100% of the cost of the home meaning no down payment is needed. You also do not need to worry about mortgage insurance if you are financing more than 80% of the homes value.
As you can see there are quite a few manufactured home finance options available to new home buyers. Take the time to research these options thoroughly and you will be sure to find the loan that works best for your financial goals.