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If you’re thinking of downsizing your home or just exploring alternative living situations, a mobile home might be a good option for you.
But a mobile home is not exactly like other types of homes. Although the cost may be significantly lower than a traditional home, you may have other expenses to consider. Here’s what you need to know about mobile home costs.
What is considered a mobile home?
In many cases, mobile homes are manufactured homes. These are houses that are built in a factory and transported to their location after being built. This is different from traditional house building – or a house built on the site – which is when a house is built on the site, it will remain there for its entire lifespan.
It is important to note that the government changed the term “mobile” to “manufactured” homes through the National Manufactured Homes Construction and Safety Standards Act, so mobile homes built after 1976 are considered as “prefabricated” houses. However, while you may see the terms “mobile home” and “manufactured home” used interchangeably, not all manufactured homes are mobile homes.
In some cases, homes are considered “mobile” when it comes to trailers. These depreciate in value like cars and other vehicles. Even though they are built to standards set by the Department of Housing and Urban Development (HUD), they are generally not considered “real” property and are instead regulated like cars. If a mobile home has wheels, they will need to be removed if the home is to be installed. They will also need what are called “ties” to anchor the house to the ground.
How much does a mobile home cost?
The price you pay for a mobile home depends on the type of home you buy, its condition and where you buy it.
- Single width: A single width home is typically up to 18 feet wide and 90 feet long. New units average around $51,000. Used units cost between $10,000 and $25,000.
- Double width: A double-width home is said to be “twice” the size of a single-width home, but they actually vary greatly in size. Some can reach 36 feet wide by 90 feet long. The most common sizes range from 1,300 to 1,800 square feet. Average prices for this size are around $107,000.
- Triple width: These homes have a maximum of 3,000 square feet. The average cost of a new mobile home of this size can reach $250,000.
Factors That Affect the Cost of a Mobile Home
Several factors can affect the total cost of buying a mobile home, including:
- Builders: If your mobile home is built offsite, you can get your home priced from a few different companies. Manufactured or prefabricated homes are built new and delivered to the permanent site in pieces for assembly.
- New or used: A used house, like a car, has already had a life before it ends up in your home, which could impact its final cost.
- Land cost: In addition to buying the property, you may also need to buy or lease the land on which the house will be located. This can be separate from buying the unit or you can buy it together with your house.
- Additions and customizations: If you’re looking to have high-end appliances or upgrade your doors, it’s likely to cost you more.
- Utilities: Add up what you will pay for internet and cable service, as well as water, sewer, and other utility hookups.
Advantages and disadvantages of buying a mobile home
Advantages of buying a mobile home
There are many advantages to buying a mobile home.
- Reduced overall cost: Compared to traditional single-family homes, mobile homes cost only a fraction of the price. According to the Federal Reserve Bank, the median selling price of a single-family home was $440,300 in the second quarter of 2022. A new triple-wide would cost you hundreds of thousands of dollars less.
- Quick build: Since the mobile homes are made in air-conditioned warehouses, you have no weather delays. They must also be built according to specific HUD codes.
- Easy customizations: You can adapt the house to your needs and even gain more space with larger units.
- Financing available: There are different ways to finance your mobile home, including loans backed by the Federal Housing Administration (FHA), US Department of Agriculture (USDA), and Department of Veterans Affairs (VA) as well as chattel mortgages.
Disadvantages of buying a mobile home
- No conventional loans: Since prefabricated mobile homes are not considered real estate, you cannot obtain traditional and conventional mortgages. If you don’t qualify for another type of financing, you may have to pay for the house in cash.
- Possible initial costs: If you are buying the land the house will be on, you may have to pay for this in addition to the costs of the house. You might also have the option of renting the property the house is on, which might be a less expensive option, depending on the location of the house.
- Limited Federal Supervision: Although these homes must be built according to HUD regulations, the agency does not regulate mobile home parks. Thus, if you encounter difficulties with a rental company or another mobile home problem, you will have to contact an association approved in your State.
How to finance a mobile home
If you’re ready to buy a mobile home, be sure to research options to qualify for the right financing.
- Movable mortgages: This is one of the most popular ways to buy a mobile home. They are specially designed for manufactured and modular homes as well as vehicles and other movable property. But if you’re late, your lender can take possession of your home, just like defaulting on a traditional mortgage.
- Government guaranteed loans: If you qualify, you may qualify for loans backed by federal agencies such as the Federal Housing Administration (FHA) or the Veterans Affairs (VA) office. These are more in line with traditional mortgages for homes, and you’ll have longer repayment terms and potentially lower interest rates compared to other types of borrowing.
- Personal loans: Most personal loans are unsecured and can be used for almost anything you need up to $100,000 or more, depending on the lender. This means you may be eligible to borrow up to the total amount you need to finance your home. But interest rates are much higher on personal loans than on mortgages. And repayment terms are significantly shorter, up to five years compared to a traditional 30-year mortgage.
How to buy a mobile home
Before signing on the dotted line, make sure you have taken certain steps to prepare for the purchase of a mobile home:
- Check your credit. Your credit score is one of the most important factors not only for obtaining financing, but also for ensuring that you qualify for the lowest interest rates available. The lower your interest rate, the less extra money you will pay over the life of your loan.
- Choose your property. In traditional home buying scenarios, you would first be prequalified. But for a mobile home, you will first need to find the land and building details. If you need to finance the purchase of the land in addition to the mobile home, this could impact how you finance your purchase. You may find that the cost is very different depending on the location, so where you find the space for your home.
- Find a lender. Once you’ve worked out the details of your mobile home, start looking at financing options. If you don’t qualify for government guaranteed loans, you may need to look elsewhere. Doing your research beforehand could save you money in the long run. Compare several different lenders, if possible, to see which offers the most favorable rates and terms. Doing your research ahead of time could help you save money in the long run.
- Complete the application. Once you have chosen the right lender, complete a comprehensive application. Submit all down payment requirements and, if you can, negotiate the total price of building or buying the land. The more upfront work you do, the less you’ll pay in the end.
How to buy a mobile home without a down payment
Although the more you invest in a home, the lower your monthly payments, not everyone has the money to put down a down payment. If you’re trying to buy a mobile home with no down payment, there are a number of ways you can do it.
You may be able to take out a loan from the United States Department of Agriculture (USDA) or the VA office without down payment, as long as you are eligible. The credit and income requirements for these types of loans are not as stringent as those for conventional loans. So if your credit isn’t great or you don’t have enough down payment, these loan options might be the best way for you to buy a mobile home without a down payment.
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