Ten Tips for Financing a Mobile Home

March 29, 2014

Most lenders want to make you the largest manufactured home loan for the longest term they can. They are, of course, in the business of making money, and big loans for many years provide more loan interest income to them.

You job is to control your household budget and your stress level.  Here’s how:

1.       Always consider taxes and insurance when budgeting your monthly manufactured home payment.  This is called “escrow” and is in addition to the principal and interest you pay.  When a lender quotes you a payment for your new home, ask if it includes taxes and insurance.

2.       When buying a manufactured home, start with as much down payment as you can afford.  Not only will you build up equity in your home faster, you monthly payments will be lower.

3.       Avoid teaser, variable  rate or balloon payment mortgages.  They may look tempting at first, but the payment shock you get when your expenses go up will make you miserable.

4.       Finance your loan for as short a time as possible, it will save you a TON of money in interest. 

For example: you will pay $12,000 less interest by financing a $32,000 loan at 10% for  5 years instead of  10 years.  But the monthly payment is just $680 for 5 years versus $423 for 10 years.

5.       All banks will require you to have homeowners insurance.  Lenders have access to national insurance companies that specialize in mobile home insurance and will generally quote good rates, but don’t be afraid to shop around.

6.       Speaking of homeowners insurance, never let it lapse.  It will cost you a few hundred dollars to get your policy reinstated, if that’s even possible, and you’ll likely pay a higher premium.

7.       Don’t let a lender  tell you “credit life” insurance is required.  (This is the insurance that pays off your loan if die or become disabled.)  It’s not required, and you may already have enough life and short term disability insurance anyway.

8.       Interest on mobile home loans may be tax deductible for those who itemize.  It’s your primary dwelling so you get a tax break, the same as real estate.

9.       Make your payments on time!  This sounds simple, but it really will improve your credit score and give you more options when you’re ready to upgrade to a larger, newer manufactured home.

10.   Before applying online with a national lender, first visit your local bank.  The bank or credit union where you have your checking account and auto loan may give you favorable terms on a mobile home loan, too!

Best advice: work with a reputable manufactured home seller like Hames Mobile Homes.  We’ve been in business for 44 years.  We’ve sold over 11,000 homes, many to repeat buyers and extended families. We have banks that like to work with us because we work with integrity. 

At Hames – The Homes People, our job is to match you with the attractive and comfortable home that you can afford.  View our extensive selection of new and used mobile homes online and explore our financing options through our in-house loan company Circle Finance LLC (NMLS#366020).  Our knowledgeable sales staff can get you started today!  Contact us online, call us at (319) 377-4863 or visit us at 5410 Wabash St. SW Cedar Rapids - at the corner of Wilson Ave. and West Post Road.

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