Buying a MH
We Make Homes Affordable
Buying a Mobile Home
Cash is King
Provided your application was approved by the Mobile Home Park, if you have the cash to purchase a MH in that park, there are practically no financial obstacles or delays to you owning one .
You'll Need Some Cash!
Most individuals only have a portion of the purchase price and will have to use that as a down payment and seek financing for the rest.
Banks do not like lending sums less than $50,000 for homes. The paperwork and administrative expenses consume a high percentage of the loan income. That leaves most MH buyers looking for private loans.
In some cases MH owners may offer seller financing to qualified buyers.
Personal Property vs Real Estate
Be aware that unless a MH is affixed, it is considered Personal Property, not Real Estate. Loans on personal property are called Chattel loans. Loans on Real Estate are called Mortgage loans. In both cases legal ownership of the property remains with the financier until the loan is paid off.
What Qualifies a Buyer?
Underwriters will typical request access to your credit records at the 3 major credit bureaus (TransUnion, EquiFax and Experian). This will allow them to review your credit history , your credit score, your payment history, your current outstanding debts and view any legal issues that you may have encountered. Your past 2 years tax returns may also be asked for, to verify your annual income.
An important factor is your Debt to Income ratio.
That is what percentage of your current income goes directly to pay off debts. For planning purposes, use the FHA’s guidelines for maximum ratios.
The FHA’s maximum qualifying debt ratios for borrowers in 2022 are 31% and 43%. This means the monthly housing payments should not exceed 31% of gross monthly income, while your total debt burden should not exceed 43% of your gross monthly income.
In considering buying a MH, make certain to include your MH finance payments if your purchase is going to be financed, as well as the monthly lot fee in calculating your debt to income ratios.
All of this may seem a bit daunting, but everyone who’s purchased any kind of home jumped through these hoops and made it. Once you get started you’ll find that the process is not that difficult.
Before embarking on buying a MH, first check your finances to see what you can afford, then set up an appointment with us, so we can review your situation and offer you ideas and suggestions.