How To Buy A Mobile Home
In most parts of the country, the cost of living has skyrocketed over the past decade. For the right person, a mobile home offers a way to own a living space at a fraction of the cost. Approximately 20 million Americans live in mobile homes and enjoy the benefits of a cheaper place to live, potentially without a reduction in quality or investment value.
If you’re interested in buying a mobile home, there’s a lot to consider. Purchasing a mobile home is different from buying a traditional site-built home, especially when it comes to financing. And while there’s a lot to learn, you may soon decide that a mobile home is the right choice for your lifestyle.
What Is A Mobile Home?
Mobile homes are prefabricated homes that are built in a factory and transported to a piece of land. As their name suggests, you can move a mobile home. Though, they are often semi-permanently located in one place for a period of time.
But, according to the Department of Housing and Urban Development, the term “mobile home” is outdated. As of 1976, they are now called manufactured homes and built to the Manufactured Home Construction and Safety Standards. Manufactured homes are built according to the HUD code and are built on a permanent chassis. These manufactured homes are different from the original version of mobile homes that we often think of from the 1950s and 1960s.
Mobile homes can be built in different sizes: single-wide, double-wide and triple-wide. Single-wide homes are usually 14 to 18 feet wide, and double-wides are double that: 28 to 36 feet. Triple-wides consist of at least three units, transported to and assembled at a destination. They can often get mistaken for standard, site-built homes.
How Much Do Mobile Homes Cost?
There is a wide range of prices available for mobile homes, though they’re almost always cheaper than a home built on-site. In May 2020, the average sales price of a new home sold in the U.S. was $368,800. In December 2019, the average sales price of manufactured homes was $86,400.
Why are they so much less expensive? The lower price is due to how materials are procured and how the homes are produced. Companies that produce manufactured homes can buy materials in bulk, receiving better costs. Plus, there is less material wasted when building a mobile home. Then they’re manufactured on an assembly line at a central location, meaning you’re getting economies of scale on labor. They’re also built faster than a site-built home, meaning you could be in your new place faster than you expect.
Tips For Buying A Mobile Home
If you’ve decided you want to explore buying a mobile home, there are some things you will want to understand:
Mobile Home Financing Is Different
You’ve decided to start shopping for a mobile home, so you head down to your bank to get a regular home loan. You’re probably going to be told that a regular 30-year mortgage isn’t an option. But don’t get frustrated – there are financing options. They just look a little different.
Paying for your mobile home is going to be different from paying for a home that has been site built. Generally, banks offering conventional mortgages might not offer this type of financing for mobile homes. And if they do, they may require that the mobile home be placed on approved foundations.
The most common way people finance their mobile home purchase is through a retail installment contract. Your retailer will set you up on a payment plan, rather than needing to work with an outside lender.
You might also consider a chattel loan. Similar to a mortgage, this is a personal property loan that can be used to purchase a mobile home, though it does come with higher interest rates and is more expensive.
What About Land?
Unlike a traditional site-built home, when you buy a mobile home, you just buy the home itself, not the land. So where are you supposed to find the real estate to put the home? Remember, mobile homes can be moved but they’re designed to stay somewhere semi-permanently. It’s not going to be a home that you move from place to place with often.
When it comes to land, you have a few options.
If you find a piece of land that you like, you buy it for your mobile home. The downside is that you’ll be responsible for developing the land, like putting utilities on it, which can be costly. The upside is that you can find a piece of land anywhere. You’re not restricted to just once place.
If you’d like land that comes with less hassle and upfront cost, a mobile home park might be a good option. In a mobile home park, you can buy land or lease it. If you decide to lease the land, you’ll need to pay monthly rent, which should cover some of the utilities and maintenance costs. If you purchase a piece of land, you’ll still have a homeowners association (HOA) fee to pay that covers utilities and maintenance. Depending on the community, you may also have amenities like a pool or tennis court to use.
It May Appreciate Just As Quickly As A Traditional Home
A common criticism of mobile homes is they don’t increase in value. Or, at the very least, they don’t appreciate at the same rate that a traditional site-built home does.
But new data from a government report rejects that common assumption. The Federal Housing Finance Agency (FHFA) published a report that shows that price appreciation of mobile homes may increase at the same rate as site-built homes.
You might be more concerned with current affordability rather than focusing on the investment of your home, but it’s good to know that it may end up being a similar investment to a traditional home.
Mobile homes offer a great alternative to traditional homes. Whether you’re on a tight budget or just want to live in a home that has been built differently, mobile homes might be a great choice for you.
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