How To Buy A Trailer Home
Trailer homes, also known as manufactured homes, can offer a cost-effective alternative to traditional homes. With the median price of homes exceeding $400,000, trailer homes can be a more affordable option while providing flexibility. Understanding the differences between mobile, modular, and manufactured homes is crucial before making a purchase decision.
Types of Trailer Homes
Trailer homes come in various types, including mobile homes, manufactured homes, and modular homes. Each type has its own characteristics and features that differentiate them from one another.
A mobile home is typically built in a factory and then transported to a property for setup. These homes were built before June 15, 1976, and are often placed on a metal frame instead of a traditional foundation. Mobile homes are best suited for those looking for a lower-priced option.
Manufactured homes are built after June 15, 1976, and are regulated by HUD standards. These homes are not intended to be moved once they are set up and are often placed on blocks, metal piers, or a permanent foundation. Manufactured homes are ideal for those looking for a new home with little setup required.
Modular homes are similar to traditional homes and are built in a factory before being shipped to the land where they will be set up. These homes can include crawlspaces, basements, and use a traditional foundation. Modular homes are best for those looking for a traditional-style home with customizable features.
Financing Options for Trailer Homes
Financing the purchase of a trailer home may require exploring different options due to the lower cost and depreciating value of these properties. Some financing options include FHA loans, Fannie Mae loans, Freddie Mac loans, VA loans, chattel loans, and personal loans.
Steps to Buying a Trailer Home
When buying a trailer home, there are several steps to follow to ensure a smooth purchasing process. These steps include checking your credit reports, deciding on buying land, determining the specifics of the home, looking for financing options, and submitting your loan application.
Factors to Consider
Location, size, and whether to buy a new or used property are essential factors to consider when buying a trailer home. The location of the home, the size of the property, and the decision to buy new or used will impact the overall cost and suitability of the home.
Current Interest Rates
Interest rates for trailer homes can vary based on factors such as credit score, down payment amount, and type of home. To qualify for low interest rates, maintaining a credit score of at least 700 is recommended.
Frequently Asked Questions
1. What credit score is needed to qualify for a mobile home loan?
The credit score requirements for mobile home loans vary depending on the lender. FHA loans may accept credit scores as low as 500, while Freddie Mac and Fannie Mae loans typically require a minimum score of 620.
2. What is the typical loan term for mobile home financing?
Loan terms for mobile home financing can range from five to 30 years, depending on the lender and loan type.
3. Is it difficult to find financing for manufactured homes?
While manufactured homes may depreciate over time, there are still financing options available. It is essential to research and compare lenders to find the right financing option based on your needs.
4. What is the difference between a manufactured home and a modular home?
Manufactured homes are built in a factory and transported to a permanent location, while modular homes are also factory-built but finished on-site. Modular homes are more similar to traditional site-built homes.
5. What are the long-term costs associated with owning a trailer home?
Long-term costs of owning a trailer home include mobile home insurance, which covers damages, repairs, and liability. The cost of insurance varies based on coverage levels and the type of home.