Buying a mobile home is becoming a growing trend among millions of Americans and for a good reason. The rise in minimalist living, coupled with the ease of transportation, makes the whole experience worthwhile. According to government statistics, 22 million U.S.households live in mobile homes, otherwise known as manufactured homes, depending on the era in which they were built.
The figure is expected to increase over the coming years, given the shift in consumer trends. Mobile homes are a great option for most people, as they are available at a fraction of the price of a traditional one. The savings derived are not limited to finances, as living in such structures is better for the environment. Moreover, they are easy to construct and assemble. This is a major selling point, especially for first-time home buyers.
Mobile home prices vary from region to region, depending on the quality and condition. And knowing the various factors that go into the overall cost is imperative for those looking to purchase a new mobile home or invest in one, which is what this guide is all about.
Factors That Influence Mobile Home Costs
The cost of a prefabricated mobile home depends on the:
- Housing type
- Price of land
- Rental cost
- Customizations and extras
Housing Type
The type of mobile home on sale may be a single-wide, double-wide, or multi-wide unit. Single-wide homes are the smallest and least expensive, having a maximum length, width, and height of 90 feet, 18 feet, and 9 feet, respectively. These dimensions are half the size of traditional homes, allowing for more affordable pricing and less on-site work.
On the flip side, buyers often have to sacrifice the number of bedrooms and bathrooms to enjoy the reduced cost. They also have to deal with smaller living spaces. Even so, these units remain in high demand due to their price point. Their size gives them a trailer-like appearance.
Double-wide units are the next in line of costliness. They measure up to 60 feet long, 16 feet wide, and 9 feet high, allowing for more customization and utilization. The units are shipped from the factory in two parts and assembled on-site. Their larger size allows for up to 3 bedrooms, 3 bathrooms, and even a dining room.
Multi-wide structures are the largest of them all and the most expensive as well. They measure up to 50 feet long and 4,500 square feet in size. While the price is significantly higher, the additional area allows for more luxury and features. They also tend to have a traditional look and feel.
Price of Land
The land on which the mobile home is located also influences its cost. This is reflected in the final price if it is provided by the seller. Property taxes, along with any other fees and costs associated with the plot, have to be paid in addition to the purchase price. The selling price of a plot of land in the U.S. ranges from $12,000 to $2.5 million, depending on the state.
Some mobile homes are sold without any land, and the buyer has to arrange for the plot separately. Mobile home buyers have to keep in mind that the prefab home must be situated on a permanent, level foundation. Proper grade work is a prerequisite, as the construction must meet local building codes.
Rental Cost
Mobile homes may be located on properties where the owner rents out the land. The buyer pays the rental cost along with the initial cost of the mobile home. The land may come with amenities like pools and recreation areas, making it more desirable. Generally, rental costs range from 5% to 9% of the land value.
Customizations and Extras
When it comes to customizations, mobile home buyers have a wide variety of choices. The larger the unit, the more features will be included. Some mobile homes come with features like vaulted ceilings, fireplaces, decks, hot tubs, and walk-in closets. Unlike cosmetic modifications, exterior add-ons like a carport and garden shed usually incur a higher cost.
Modifications for accessibility are always an option, making mobile homes attractive to senior citizens. Specialized units can accommodate wheelchair ramps, widened doorways, and grab bars. Such prefab buildings will cost more than the average mobile home and must comply with accessibility standards.
How Much Are New Mobile Homes?
New mobile home costs are calculated using the above-mentioned variables. Single-wide prefab units start from about $40,000 and go up to $59,000. Double-wide units are priced from $75,000 to $175,000, depending on the size, amenities, and features. Multi-wide units go for around $250,000, with the price of land factored in.
Price of Used Mobile Homes
Used mobile homes also come at different prices, depending on their age, condition, and other factors. The cost can range from $10,000 to $25,000 for older, single-wide units. Used double-wides range in price from $35,000 to $50,000, while multi-wides start at about $50,000.
New mobile homes come with manufacturer warranties and extended warranties from dealerships that cover any defects and manufacturing flaws for a set period. On the other hand, used units are generally sold without a warranty. As such, buyers are advised to do their homework on the seller to determine the condition of the unit.
Cost of Moving a Mobile Home
Prefab homes are shipped via either category: full service or transport only. The former means that the units are dismantled and loaded onto a heavy-duty truck. They are then shipped and assembled at their final destinations. On the other hand, the latter means that the transport company picks up the mobile home and drops it at the new location.
A full-service incurs considerable additional costs and labor. The buyer has to fork out anywhere between $3,000 and $14,000. Those who opt for transport only pay the shipping cost, which ranges from $700 to $3,500. For both cases, it is essential to check the moving company’s insurance coverage. Otherwise, the costs of any damage caused to the mobile home are the buyer’s responsibility.
How to Finance a Mobile Home
Mobile homes are one of the more affordable properties in the U.S. This makes them easier to finance, apart from having a lower down payment than a standard house. A personal loan is one way to go about it, considering its flexibility. In addition, no collateral is needed to secure funds.
However, keep in mind that interest rates are typically higher than those of other financing options, especially for borrowers with bad credit. Setting up a personal loan is affordable and, in some cases, comes at no cost. Since it isn’t secured, buyers need not worry about forfeiting the home to the lender.
Personal loans are available in amounts ranging from $25,000 to $100,000, depending on the lender. Other than this financing option, traditional mortgages are also a good choice. Included here are VA, FHA, and USDA loans. The down payment is generally lower, as compared to standard mortgages.
The FHA and USDA loans have a lower credit score requirement and may not require any collateral. Buyers can also finance their mobile homes through specialized manufactured home loans such as Freddie Mac and Fannie Mae. All of these loans are designed for long-term repayment.
How Much Down Payment is Required?
Mobile home buyers who qualify for traditional mortgages typically have to put down 3.5% of the total cost of the unit. For some, no down payment is required. In addition, the mortgage term ranges from 15 to 30 years. Buyers can pay off the mortgage early at any time with no penalties.
The Financing Process for Mobile Homes
The mobile home buying process is similar to that of traditional homes. Certain steps to consider include:
Evaluating Personal Credit Reports
The requirements for credit scores vary, but it is crucial to understand how the components of the score are weighted in the overall rating. Potential home buyers with blemished credit should know to improve their scores, such as by paying bills on time and keeping debt levels low.
If there is a mistake in the credit report, notify the three major credit bureaus to have it corrected immediately. A bad credit score will hurt the chances of loan approval or increase the interest rate.
Determine the Type of Mobile Home to Purchase
The choice of home is largely based on personal preferences and budget. Manufactured homes come in a variety of sizes, shapes, and styles. Some are single-wides, while others are double-wides and multi-wides.
A potential buyer may get loan approval (or not), depending on the type of mobile unit chosen. For homes above the standard price bracket, a lender may not grant the borrower a loan.
For this reason, buyers need to conduct thorough research before making the final decision.
Decide Whether to Purchase the Home and Land Together
Landowners are more likely to be accepted by lenders than renters. This is because has a vested interest in staying on the property for the long term, especially when the mobile home has its mobility features removed. Such factors make lenders more comfortable.
Shop Around for Ideal Financing Options
Banks and credit unions offer a variety of financing solutions for different budgets and needs. They also have different qualifications for loan approval. As such, it is a good idea to shop around for the best deal and rates. Lenders who are keen to service a particular demographic may also be an option.
Apply for the Loan
Application forms can be downloaded from various online sources. Buyers are also free to talk to a lending representative over the phone to get the process started. The application will need basic information, including credit score, income, and assets.
Verify the Mobile Home Insurance Coverage
While many lenders don’t require insurance, others may require it before they approve the loan. Certain policies include liability, which covers the home buyer for any injuries or damages caused to a third party.
These policies are mandatory, but the premium is usually paid as a monthly fee. Others pay only if a loss occurs. This means that the monthly premium may be lower than that of a standard homeowner’s insurance policy.
How Much is a Monthly Payment on a Mobile Home?
The monthly payment depends on a number of factors, such as the loan amount, interest rate, and the loan term. Ideally, the payment should not exceed 25% of a buyer’s income. This way, it is possible to make ends meet while also meeting the loan repayment schedule.
A double-wide manufactured unit worth $70,000 may require a down payment of $3,500 and a monthly payment of $350. Payments can be made via automatic withdrawals from the borrower’s bank account.
Factors to Consider When Buying a Mobile Home
Mobile home buyers can save money and time by getting prepared before they get to the dealership. In order to be as informed as possible, here are some factors to consider:
- Location of home
- Size of the unit
- Condition
- Long-term expenses
Each of these factors can affect the cost of the unit. For instance, a low-cost home in a suitable location may save the buyer a lot of money. A bigger mobile home may need more funds, but it has a larger floor area that can accommodate a growing family.
Why Buy a Mobile Home?
There are many benefits of owning a mobile home, such as:
- Affordability
- Lower property taxes
- A wide range of customizations
- Easy construction
- Guaranteed safety
While a mobile home has many benefits, it may be prudent to consider the disadvantages before making a decision. For instance, mobile homes have lower resale value than their traditional counterparts. Plus they are more difficult to sell in a slow market as well.
Conclusion
Mobile homes have come a long way from their early days. The modern-day units are more affordable, comfortable, and durable, and are a great option for many buyers. With the right information, anyone can make a sound decision when it comes to buying a mobile home. It boils down to selecting a reliable and experienced dealer who can walk the buyer through the process, including the different options.
Whether you are looking to invest in the whole park or individual mobile homes, there is no doubt that you will find everything you will ever need with these books to invest in mobile homes and secure your wealth for life.
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Before you go, check out my list sharing the Best Books for Investing in Mobile Homes