Home Mortgage: Manufactured home finance

Manufactured homes are the latest fad. More and more people are choosing this option to live the life of their dreams. The manufactured homes these days are made with premium materials and cannot be distinguished from conventional homes. Getting finance for manufactured homes are still very unconventional.

The mobility of the home is of prime importance when availing finance. The less mobile the home, better financial deals would be available. Manufactured homes are financed under personal property. These loans require a down payment of ten percent. The loan term can extend from ten to fifteen years. Interest rates that are applicable are higher than normal mortgages are like those applied on boat and car loans. The interest that is paid is deductible under taxation laws. There is still ambiguity on whether these loans can be called as mortgages. These are principle homes.

Many loans for manufactured homes these days require only five percent down payment and can be repaid over a period of twenty to thirty years. If the manufactured home is not likely to be mobile and the borrower owns the land it stands on, then the loan is considered as a mortgage and is eligible for other tax benefits.

Fannie Mae and Freddie Mac are also in the market providing loans for manufactured homes. Manufactured houses are very affordable to the common man and hence loans on them are many in the market. The manufactured housing business is a fourteen billion dollar industry. Te average price of a manufactured home is around forty thousand dollars, of area 1,400 square feet which was centrally cooled. Things have improved now, with homes with many sections. The manufactured houses have started looking more like their original counterparts.

Financing for these homes are just like traditional homes but with certain differences. As mentioned before, high rates of interest is the norm. High rates are demanded taking into consideration the repayment capacity of the borrower. Manufactured homes are cheap collateral since the depreciation rate is quick and they do not last as long as conventional homes. Fees of various kinds like administrative fees, credit report fees, fees for document preparation etc are passed on to the lender and is repaid as higher rates of interest. The most popular type of loan given for these properties is the personal loans. The rates of interest for new manufactured homes are less as compared to used ones. Since manufactured homes come with wheels, even if they are taken off for being installed, they are considered to be potentially mobile and so the borrowers have to pay annual license fees for vehicles.

Most of the retailers who sell these manufactured homes, arrange loans too. This loan amounts to nearly eighty percent of the loan given for manufactured homes. Most of the manufactured homes are usually located in parks and courts that are specifically made for these communities. A wide choice of loans with fixed and variable rates of interest is made available for the owners. Many of them though prefer to stay away.