Are you interested in purchasing a mobile home? Also known as a caravan or a trailer, a mobile home is a popular option for a homeowner wishing to avoid large down payments, expensive maintenance costs, monthly mortgage payments and high property taxes. If bad credit ratings are preventing you from purchasing a traditional house, you can find private loan resources to extend financial assistance at a fixed rate for buying a mobile home. Your dream of owning your own home is not as far away as you may think. Here are some tips to help get you started.
A financial advantage for first-time homeowners
For first-time homebuyers, a mobile home offers a cheaper option than obtaining a traditional house. New mobile homes range in price from about $35,000 for a single-wide structure in the mid-Western United States to $85,000 for a double-wide structure in the West. Used mobile homes also range in price, based on age, condition and location. You can find a 1970s mobile home going for $5,000 or $15,000, depending on those factors. Usually the newer the model, the better condition it is in and the higher the price will be. One buyer reported spending $2,000 on a mobile home and $500 in repairs to make it inhabitable.
Some advantages to buying a mobile home include lower costs in maintenance, monthly loan payments and property taxes. While a trailer general resells for a loss, it can be a good investment if built on sound property. One mobile homeowner reported reselling a $20,000 home for $45,000 due to the value of the property it was on. On the other hand, if your mobile home is surrounded by other mobile homes, the value will probably decrease. Ask a real estate agent in your area to clue you in on the resale value of mobile homes before you commit to buying one.
Good credit/bad credit -- get that loan
Getting a low interest rate mobile home loan is very possible using the FHA mortgage program. Two kinds of loans are available: one for those who own the land that the home will be on and the other for mobile homes situated in mobile home parks. Potential homeowners with poor credit ratings who are applying for financial assistance to buy a mobile home are in for good news. While these are not governmentally funded as a low interest loans, private funders can provide a loan at a fixed rate depending on the current market, with a tenure ranging from 15 to 25 years, depending on location. The down side is that these loans can come in at a higher interest rate due to the risk involved for the lender. In any case, a prospective homeowner is required to show that the caravan will be his primary residence and that he is financially able to pay back the loan, in addition to being able to pay a down payment of at least 5 percent and have a suitable site available where the home can be placed. This site can be either leased or owned.
Land and loan qualifications
Of course, you'll need to make sure the land you're considering is zoned for a mobile home. Become familiar with local deed restrictions and other legal factors such as restrictive covenants as well. In order to receive a loan for purchasing a mobile home, you'll need the proper certification for safety standards and proper construction of the home. The dealer or retailer selling you the mobile home can not only assist in giving this required documentation for your loan application, but can also provide names of lenders who specialize in financing these kinds of homes. The trailer will need to comply with safety standards -- carrying a one-year warranty -- and its site must meet the current standards for water, electricity, and sewage disposal. While you may not buy furniture with the loan, you can use it to finance anything that is built in to the house, such as air conditioners or carpeting.
Mobile homes built before 1976
Many caravans built before 1976 have aluminum wiring, which can be a fire hazard. This is easily checked by taking off an electrical outlet and shining a flashlight inside. If the bare ends of the wires are silver-covered, they are most likely aluminum. You may need do rewire the building for insurance purposes, in which case you can make a lower offer. But make sure the home is insurable before you buy and be aware that it may be harder to sell. Also be aware that older models may mean higher interest rates. Mobile homes built before 1976 do not qualify for Section 184 Financing through the Department of Housing and Urban Development (HUD).
Problems to look out for
If the home is settling irregularly, the walls may look wavy and the door frames may seem crooked. Check for ceiling stains that indicate roof leaks. A seriously sagging roof is a sure sign of rotting wood. If the stains appear dry after a recent rainstorm, then the leaks have probably been repaired. Test the strength of the floors by stepping hard on them. Particle-board floors will warp or rot when they get wet, particularly around the toilet. If you are handy, rebuilding floors can cost under $100. With a bit of research and planning, you're bound to make your home safe, comfortable and affordable.