Financing Your Manufactured Home
If you’re looking for a newly built, modern home with a lower monthly mortgage payment, consider purchasing a manufactured home. According to the United States Census Bureau, the average price for a site-built or traditionally-built home in 2018 was $407,300 compared to $71,300 for a manufactured home.
Manufactured homes are a financially smart choice for first-time homebuyers or those searching for an ideal family home, They are low maintenance, have the longevity of a traditionally-built home, plus offer a variety of open floor plans designed for today’s living.
And similar to a traditional build, you can finance the purchase of a manufactured home. The same qualifying factors also apply - a credit score in the mid-600s, an income that is approximately three times the amount of the mortgage payment, and a 10-20% down payment (less depending on the lender).
If you own the land the home is under, banks, credit unions, and other lending institutions will be able to finance your mortgage. However, if you don’t own the land or plan on purchasing it, you can still obtain a mortgage through a government-funded program. Here are the available funding options:
United States Department of Agriculture (USDA) Programs
USDA loans originate with private lenders and are guaranteed by the U.S. Department of Agriculture. However, borrowers do not need to work in agriculture to be eligible for this loan. Eligibility is based on location, borrowers searching for a home within specified suburban and rural areas may qualify for a USDA loan.
The upside to a USDA loan is that no downpayment is required, meaning your mortgage can be 100% funded. The downside is that a 2% Guarantee fee is added to the total amount of the loan, plus a .5% annual fee is assessed on you monthly mortgage payment. A USDA loan also requires a minimum credit score of 650 and carries certain income maximums; household income cannot exceed 115% of the median household income in your area and the monthly payment should be less than 34% of your household’s gross income.
Federal Housing Administrator (FHA) Programs
If you don’t qualify for a USDA loan, consider applying for an FHA loan especially if you’re a first-time homebuyer. Unlike other programs, FHA insures the loan which is funded by the government. An FHA loan offers borrowers a 3.5% minimum down payment and a lower minimum credit score requirement (580) as compared to other loan products.
An FHA loan does require borrowers to pay an upfront cost of 1.75% of the total amount of the loan which can be rolled into the full loan amount, and an annual mortgage insurance premium of approximately .85% which is added to the monthly payment. Borrowers will pay mortgage insurance over the life of the loan if the down payment is less than 10%; it will be removed after 11 years if the down payment is more than 10%.
Whatever you're looking for - you'll find it at Dutchtown Homes! We offer homes from the leading producers of modular and manufactured homes - unquestionably the best value in new homes today! With over 20 years of experience in helping families in southern Indiana find the perfect home, Dutchtown Homes is your #1 choice for quality, comfort, and value. Visit our website or call us at 812-354-2197.
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