Getting approval to buy a home can be difficult to do, especially if you have limited funding available or if you have damaged your credit history in the past. Many people who are looking to start off their life on the right foot or who are looking to start over again, often find that mobile homes are a great option to consider. A mobile home provides you with a great place to live without the high price tag that comes with traditional stick-built houses.
Save Money Over Time
Since mobile homes aren’t overly expensive, many people choose to save up their money over time and pay for them outright. It often takes just a few years to be able to afford to buy a mobile home without any financing through a private lender at all. If you want to pay for a home outright, it’s a good idea to do some research before you even start saving. You need to know exactly how much the home will cost, including transportation costs and the cost to purchase or rent a piece of property to put the home on. This allows you to know how much you truly need to save in order to reach your goal.
Borrow Money from Friends and Family
If you have a poor credit rating or have no credit history at all, it can sometimes be difficult to get a loan to buy a house. This is where friends and family can sometimes come into play. Your friends and family may allow you to borrow money to buy a mobile home since they aren’t overly expensive to buy.
You need to be sure that you establish how much you are going to buy from them and how much your payments will be to them each month before agreeing to borrow the money. You need to be diligent in paying the money back as money can create chaos in a relationship if it is not paid back the way that it was promised to be. It’s a good idea to put everything in writing so that the person you are borrowing money from knows that you are serious about paying the money back to them.
Rent to Own the Mobile Home
Many people who own mobile homes don’t want to have to go through the hassle of selling the home and having someone move it. They will often choose to rent out their homes in the location where it stands instead of selling it. If you find a home that is available for rent that you really like, talk to the homeowner about possibly renting to own the home. You will pay a fee each month, and a portion of the fee that you pay will go toward the purchase of the home.
It’s important to make sure that a contract is created by a lawyer that ensures that it is clearly stated how much of the payment you make each month goes toward the cost of purchasing the house. The agreement also needs to state the final cost of purchasing the home and if the property that the home sits on is included in the purchase. If the home is located in a mobile home community, you can choose to continue living in the same place or have the home moved once you finish paying for it.
Owner-Finance the Home
If you want to purchase a home and don’t want to worry about the hassle of renting it, look for a mobile home that is available with an owner financing option. When someone owns a mobile home that they no longer want, they often allow people to pay for it over time.
The owner may allow you to move into the home before you finish paying for it, but many times they require a large sum of the home to be paid for before allowing you to move into it. This is because they are taking such a risk to offer to finance on their own. They will charge an interest rate for the financing and expect you to pay a minimum payment each month toward the home. It will work the same way that it would if you got a mortgage from a traditional lender, only your credit history more than likely won’t come into play.
Traditional Home Loan
Traditional lenders are banks or mortgage brokers who specialize in the financing of homes. They will offer you the ability to pay for the mobile home over time but may require you to put down a down payment for the home. Traditional lenders do take your credit history into account and will often need to know how much money you make each month, what your other outstanding debts are, and take a few weeks or even months to approve your loan. They will charge interest on the loan, but many lenders will allow you to pay off your debt quickly in order to avoid some of the interest charges that come with the loan. It is often much easier to get approval for a traditional loan when buying a mobile home because their asking price for the homes is a fraction of what a stick-built house will be.
You will need to prove to a traditional lender that the home is in good condition and is habitable. They may send an inspector to the home to look it over before approving your home loan. This is to ensure that they aren’t putting their money at risk by lending money towards a home that you won’t actually be able to live in once you get the loan.
Once you get financing for the home, you can go through with the purchase of the property. A mobile home can be a great starter home because it often doesn’t put people into as much of a financial bind as stick-built homes do. They are also very easy to upkeep, and because of the small size it often doesn’t take as much money to furnish them as traditional homes do.