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01/01/2024

Buying a Mobile Home in 5 Easy Steps



A gray and blue manufactured home often thought of as a mobile home

Most experts agree that it’s cheaper to buy a manufactured or mobile home than a traditionally built home, and with housing prices, interest rates, and rental costs soaring, many people are looking at mobile homes as a good option for their housing needs.

There are many pros to buying a mobile home. There is an almost endless variety of mobile and manufactured homes available to accommodate any size family. Single-, double-, and triple-wide models open a world of possibilities. Mobile homes also offer many options to customize your home with the addition of a porch, garage, etc.

Another reason to select a mobile home is its solid construction and energy efficiency. Due to their factory construction enclosed from the elements, and stringent HUD codes, these homes are built with consistent, reliable processes, and many receive Energy StarŪ status. The energy efficiency of the homes themselves, along with the appliances they feature, can mean lower energy costs over the life of the home.

So, perhaps a mobile home is the choice for you. Before you start your new home search, take a moment to understand what is needed to finance your mobile home with these five tips.

1. Know the true difference between the terms “mobile” and “manufactured” homes.

You will hear these two terms thrown around as if they mean the same thing. However, there are differences between mobile and manufactured homes. The true definition of a mobile home is a home that was factory-built way back before the introduction of the National Mobile Home Construction and Safety Standards Act of 1974 and the HUD Manufactured Home Construction and Safety Standards introduced in 1976. Manufactured homes are homes that were factory-built after this time when new safety standards were established.

For purposes of this discussion, we will use both “mobile” and “manufactured” homes to refer to homes manufactured after 1976 because they are used interchangeably throughout the industry.

A gray manufactured home ready for a buyer

2. Gather documents needed for financing or buying a mobile home early.

No matter what kind of mortgage you apply for, you’ll need to provide documents that prove your identity and income history. It’s smart to have these ready as you begin the home search.

Examples of documents needed for buying a mobile home include:

  • Tax returns and W-2s/1099s for the last 2 years
  • Current pay stubs
  • Your Social Security card and driver’s license or ID
  • Bank statements from the last 3–6 months
  • If applicable, documentation for income from retirement, Social Security, alimony, child support, etc.

3. Get comfortable with your homeowner’s budget.

Buying your mobile home involves many more expenses than the down payment and monthly mortgage payments. Just as with buying a site-built home, you need to consider closing costs and more. It’s time to take a good clear look at your financial health to be sure you’re in a good position to buy a home.

Start by checking your credit score to be sure that there’s nothing out of line. In general, the higher your credit score, the lower the interest rate on your home loan.

Take a look at all your debts. Figure out your DTI (Debt to Income) ratio. Compare what you owe in relation to your monthly income and use our affordability calculator to help. Consider consolidating your bills to pay them off more effectively with lower interest rates. The higher your DTI, the more difficult it may be to get a loan. Look for ways you can reduce your expenses or bring in more income.

A gray manufactured home with white shutters and a garage

4. Establish whether you need a loan for a mobile home and land or just the home.

Do you already own property where you will place your mobile home? This can help you by using the owned property as collateral for your home loan. Whether purchasing a new or used mobile home, you may be looking for one loan to cover both the cost of the home and the land where you plan to place the home. This can simplify things by combining the application and approval process, along with including some land improvements such as septic or constructing a home foundation in the loan.

Take time to research the kinds of loans available to you. You can ask your mobile or manufacture home lender about options such as conventional, FHA, USDA, or VA loans. Chattel mortgages or loans are specifically for mobile or manufactured homes or other movable property.

A white mobile home with black shutters

5. Choose a mobile or manufacture home lender you can trust.

When you decide that buying a mobile or manufactured home is right for you and it’s time to enter the homeownership market, 21st Mortgage is here to help. As the nation’s number one mobile and manufactured home lender, you’ll find the steps to homeownership are easier with an expert partner you can trust. Now may be the perfect time to put your rent money to better use and build equity with a mobile home you’ll enjoy for years.

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