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A Complete Guide To Buying A Mobile Home

7-Minute ReadJanuary 11, 2022


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. While there’s a lot to learn, you may soon decide that a mobile home is the right choice for your lifestyle.

Let’s take a look at what you need to know before buying a mobile home, including the types of mobile homes available, the costs and available financing options, along with the pros and cons of this housing style.

What Is A Mobile Home?

Mobile homes are homes built in a factory and transported to a piece of land. As its name suggests, you can move a mobile home. However, these homes are often semi-permanently located in one place for a period of time.

But, according to the Department of Housing and Urban Development (HUD), the term “mobile home” is outdated. As of 1976, they are called “manufactured homes” and are built to the Manufactured Home Construction and Safety Standards. Manufactured homes are also built according to the HUD code, and on a permanent chassis. These manufactured homes are different from the original version of mobile homes from the 1950s and 1960s.

Types Of Mobile Homes

Mobile homes can be built in different sizes. The most common descriptions for mobile homes are:

  • Single-wides: These homes are usually 14 – 18 feet wide. They are typically long and narrow in shape. The rooms in a single-wide do not connect through any hallways.
  • Double-wides: These homes are double the size of a single-wide, usually around 28 – 36 feet. Some of the rooms in a double-wide do connect through hallways.
  • Triple-wides: These homes consist of at least three units with multiple bedrooms and more space than single- or double-wides. They are transported to and assembled at a destination and are often mistaken for standard, site-built homes.

Choosing A New Vs. Used Mobile Home

When it comes to choosing the right mobile home for you and your budget, one of the first decisions you’ll need to make is whether you want to purchase a new manufactured home or an existing one. These homes come in a variety of models and sizes, so it’s important to research the size, layout and features you desire before searching for either a new or existing mobile home.

Owning Vs. Renting Your Land

There are two options that you can choose from when selecting land for your mobile home. You can either purchase a plot of land for your home to reside on, or you can rent land from a mobile home park or a manufactured home community. Whichever option you choose, you’ll want to factor the price of either one into your total cost.

How Much Do Mobile Homes Cost?

There is a wide range of prices available for mobile homes, though they’re almost always cheaper than homes built on-site. In October 2021, the average sales price of a new home sold in the U.S. was $407,700. At the same time, the average sales price of a manufactured home was $106,800.

Why are manufactured homes so much less expensive than on-site homes? 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.

Hidden Cost of Buying A Mobile Home

When it comes to buying a mobile home, there may be some unexpected fees associated with homeownership that you will need to factor into your overall costs. These costs can add up quickly when you consider that they extend beyond the cost of customizing and adding on to the mobile home you select.

One of these costs you’ll want to consider is the monthly fee to rent a lot. If you choose not to purchase a plot of land for your home to reside on, you’ll need to pay this rent to a park owner.

If you obtain a loan for your purchase, you may also be required to pay for mobile home insurance. Much like traditional homeowners insurance, mobile home insurance can help protect you and your lender in the case of damage from a fire or a natural disaster, or loss from theft.

How To Buy A Mobile Home

If you’re interested in buying a mobile home, follow these guidelines to secure your future home-on-the-go.

Find Mobile Home Financing

If you try to get a typical home loan to purchase a mobile home, the loan lender will probably say that a 30-year mortgage isn’t an option. But don’t get frustrated – there are plenty of other mobile home financing options. They just look a little different.
Most loan lenders don’t offer conventional mortgages to people interested in purchasing a mobile home. 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. This means that the mobile home seller will issue the loan and establish the repayment plan, rather than needing to work with a third-party lender.

Another popular payment option is to take out a personal loan for a mobile home. These are flexible loans and don’t require borrowers to put down collateral. While interest rates for personal loans are usually higher than traditional mortgages, the process to approve and fund the loan can be completed within a few business days.

You might also consider a chattel loan. This is a type of mortgage that’s secured by a movable piece of personal property, meaning that borrowers can use vehicles, equipment or their mobile homes as collateral on the loan. Chattel mortgages typically have smaller loan amounts and shorter terms, as well as interest rates that are significantly higher than a traditional mortgage.

Secure A Semi-Permanent Parking Spot

Unlike a traditional site-built home, when you buy a mobile home, you only buy the home, 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. When it comes to land, you have a few options.

If you find a piece of land that you like, you can buy it for your mobile home. The downside is that you’ll be responsible for developing the land, including installing utilities on it, which can be a costly process. The upside to this option is that you can find a piece of land anywhere, and you’re not restricted to just one place.

If you’d like to position your mobile home somewhere with less hassle and upfront costs, 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 to pay a homeowners association (HOA) fee that covers the cost of utilities and maintenance. Depending on the community, you may also have access to amenities like a pool or a tennis court.

The Pros And Cons Of Buying A Mobile Home

As with any major purchase, it’s important to weigh the benefits and drawbacks of buying a mobile home. Let’s review some of the pros and cons of buying your own mobile home.

The Pros Of Buying A Mobile Home

  • They’re more affordable than traditional housing options. As mentioned above, mobile homes are a low-cost housing option that makes homeownership more attainable. Plus, mobile homes cost less per square foot than traditional houses, so you can stretch out for less money.
  • The home’s location is flexible. As its name suggests, one of the perks of owning a mobile home is being able to bring it to new locations. Mobile home owners have the option to pick up and move their house from one semi-permanent spot to the next, which is a popular trait among homeowners who enjoy a change in scenery.
  • The home’s quality is federally mandated. Since manufactured homes must meet the structural and quality standards set by HUD, homeowners can rest easy knowing that their mobile home is up to code.
  • Mobile homes are quickly constructed and installed. As opposed to the long construction timelines of traditional homes, mobile home buyers can expect the building process to take anywhere from 2 – 4 months.

The Cons Of Buying A Mobile Home

  • You still have to find and pay for land. Unfortunately, it can be difficult for mobile home owners to find available land with proper access to utilities, especially in suburban areas. If you choose to purchase a lot within a mobile home park, you still have to pay rent on the land.
  • There are stringent lender requirements. Since mobile homes are considered personal property instead of “real property,” the options provided by loan lenders are limited. While chattel mortgages and retail installment contracts are available to finance a mobile home purchase, they contain more stringent requirements on the type of structure that qualifies for a loan.
  • They are smaller than traditional homes. If you’re committing to living in a mobile home, you have to be prepared to sleep, eat and work in a smaller space. Luckily, there are plenty of ways to remodel your small space to make it functional as well as cozy.

Is Buying A Mobile Home A Worthwhile Investment?

A common criticism of mobile homes is that 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.

Final Thoughts: Should I Buy A Mobile 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.

If you’re ready to explore your mobile home financing options, start by applying for a personal loan with Rocket Loans today.

*Same day funding is available for clients completing the loan process and signing the Promissory Note by 1:00 p.m. ET on a business day. Also note, the ACH credit will be submitted to your bank the same business day. This may result in same day funding, but results may vary, and your bank may have rules that limit our ability to credit your account. We are not responsible for delays that may occur due to an incorrect routing number, an incorrect account number or errors of your financial institution.

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