Now is the Time to Buy Your First Mobile Home

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There are many reasons to buy your first home now, and purchasing a manufactured home can be more affordable than renting an apartment. The first reason to buy a mobile home is low mortgage rates. If you have good credit, and a down payment, you can get into a manufactured home for less than renting in most cities. Another reason to consider buying a mobile home right now is the state of the market. Prices on homes are hitting the bottom of the curve, many economists predict. So, if you buy now, there is a good chance that the property and home will increase in value over the next few years. Of course, it is always a good idea to invest in a home rather than rent because your money is going towards purchasing an asset.

Mobile home financing is difficult to come by compared to a year ago, but there are still options available. We can tell you in a short phone conversation how likely you are going to be approved, and at what rate. You’ve got nothing to lose by calling to find out if buying a manufactured home is a smart idea. Getting financing can be scary, but with seasoned mobile home loan experts behind you there is nothing to worry about.

Lenders Profit as Mortgage Market Changes

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An Mortgage Bankers Association (MBA) spokesperson said that several independent mortgage companies made extreme changes in their loan product offerings. This includes an increase in writing FHA loans, a category which increased to 45 percent of loans in 2008 from 10 percent the year before. Lenders reported that they closed an average of 56.6 percent of all loan applications.

The Fed has been providing liquidity to the mortgage market in their purchase of Mortgage Backed Securities (MBS). Between August 13 and August 19, the Federal Reserve purchased a gross total of $26.640 billion agency MBS.

The Fed purchased an average of $5.00 billion per day, up from last week’s $4.08 billion per day. This doubled the average daily originator selling, illustrating that the Fed continues to provide a generous supply of liquidity to mortgage bankers looking to hedge their pipelines of committed and uncommitted loans.

We can only hope that the evolving mortgage market swings back to more responsible lending practices, especially in the mobile home market. Manufactured homes ar very difficult to finance and refinance currently, which is a sobering fact among the retired and elderly in America, because they are the majority of Americans being targeted as “risky” by lenders.

Banks were irresponsible with loose lending practices such as “stated income,” but now they are too tight in their lending procedures. Now, there are so few programs, that the entire mobile home mortgage market is at a standstill. With their retirement only a fraction of what it used to be, retired Americans cannot even pull equity out of their manufactured homes. This is because their homes have dropped in value, and lenders look for any reason to decline their loan application.

The moral of the story is that banks were too loose, now their too tight. And America is left asking: WILL LENDERS EVER GET IT RIGHT?

Banks Remain Tight on Lending Standards

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Lenders are Tight on Home Loans

Lenders are Tight on Home Loans

“Domestic banks indicated that they continued to tighten standards and terms over the past three months on all major types of loans to businesses and households,” the Federal  Reserve’s survey of senior loan officers said.

Looking ahead, the Fed said most banks plan to keep lending standards tighter than average levels over the past decade, but that should be expected given the reputation lenders made for themselves leading up to the subprime crisis.

This is definitely expected, however very unwelcome. These tight standards that banks now hold themselves to can only be compared to a farmer that depletes all the resources from the soil as fast as possible, then blames the grocery store for their loss in livelihood. The banks have been taking supreme advantage of the loose legislation for half a decade, and they are very irresponsible for doing so. Now, the hens have come home to roost, and the banks are acting irresponsibly in the other direction. Lenders are finding phantom reasons to decline even the lowest risk loans.

In an economy that the banks are majorly responsible for ruining, they are now proceeding to decline America by acting reactively and not responsibly. A retired American with a good bank account, credit score and income cannot get a loan to purchase a manufactured home, even though Berkshire Hatheway recently came out and said that they are a lower risk than a traditional home loan.

Banks and their irresponsible tight lending practices are sending ripples throughout an already brittle economy, and the ripples are effecting the working and retired alike.

Manufactured Home Finance or Refinance: Get a Credit Report

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Credit Report and Manufactured Home Financing

Credit Report and Manufactured Home Financing

If you are considering buying or refinancing a manufactured home, make sure you get a copy of your credit report and review it for its accuracy. It is possible that there are errors on your credit report, and if they aren’t corrected before you apply for a manufactured home loan, the errors can derail the entire process.  Each year as a consumer, you can request a free copy of your credit report from each of the credit reporting agencies.   You can contact them via phone to request or on line by visiting www.Experian.com, www.Equifax.com and www.Transunion.com.  Please note, these reports will NOT provide a credit score for free, only a credit report. In order to secure a par interest rate you must have a FICO score of 740 or higher. If you are looking to use FHA financing, expect the rate to be higher than conventional financing.

This morning, we are seeing the best mortgage rates of the last several weeks.  Each time rates fall below 5%, they have not remained there for very long. The last time we saw 4.875%, it was available for all of one day!  This has been a very consistent pattern since early Summer. As such, I will caution you to not get too greedy. Can rates move lower?  Absolutely, but there is much more room above for rates to go higher. Rates move much faster upward than they move lower as lenders are reluctant to pass along lower rates. If you can lock a rate today under 5% on your mobile home financing or refinance your manufactured home loan you might want to take advantage.

The Housing Market as it Relates to Refinancing your Mobile Home

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Because the interest rates are very low, now is a very good time to refinance your manufactured home loan to lower your interest rate or lower your monthly payments. Now is generally not the time to take equity out of your mobile home or site-built home, because the housing prices have hit a low point. “We’re starting to see signs of stabilization in the mortgage market,” says Jim lockhart. Fannie Mae and Freddie Mac have refinance almost 1.9 million mortgage loans. Housing Prices are beginning to look as though they have hit a bottom, and this usually means that they will slowly start to climb again.

3 Reasons to go with a Manufactured Home Finance Professional

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Using a manufactured home finance specialist will save you money and grief.

Using a manufactured home finance specialist will save you money and grief.

It seems like common sense that if you need financing for a manufactured home, then working with a lender or broker that specialize in your needs is the way to go. However, many mobile home buyers are lied to or deceived by desperate agents or companies that specialize in traditional lending, trying to break into mobile home loans. Only after dragging their customers through the entire (process and racking up quite a bill), do they realize that they could not secure financing for a manufactured home to begin with. Many of our customers don’t find us until another lender or broker has cost them up to $1,000. If this isn’t convincing enough, here are 3 reasons to seek out a mobile home loan professional to learn your financing options.

1. The banking and real estate market changes every day, and this includes the mobile home market.

Only a specialist in mobile home finance will know the lenders that do and don’t lend for manufactured home loans. Many lenders that used to lend for mobile homes, stopped their programs within the past 6 months, and if they didn’t cancel their program they have changed it quite a bit. Only a firm that specializes in mobile home finance will know the ebb and flow of this highly specific niche market.

2. Manufactured home finance has it’s own laws and regulations.

An agent or broker that only works with traditional loans does not know the intricacies of the mobile home market. This leaves the buyer, seller and any third party very exposed to legal action if the agent or broker’s ignorance causes any legal or regulatory snags in the deal. Manufactured homes are treated very differently in federal and state laws, and unless the agent or mortgage broker is in the know, there is a huge potential for a catastrophic mistake.

3. Using a mobile home loan specialist will save you money, short term and long term.

Real estate agents and mortgage brokers without mobile home experience try to apply their traditional housing experience to mobile homes, and this does not work. They will charge you to get an appraisal on a home that may not even have any comparable sales in the area, which makes it nearly impossible to finance. This will waste $400 of your hard earned money, and you’ll get nothing for it. A manufactured home specialist knows the process, and you will enjoy the wealth of experience they currently have, instead of being drug through the learning curve of a stick-built agent. Use a manufactured home finance expert from the beginning, and you are much better off.

Renting vs. Buying a Manufactured Home

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Renting vs. Buying a manufactured Home

Renting vs. Buying a manufactured Home

How do you know what makes more sense, renting an apartment or buying a mobile home? There are many factors that come into play, and the process of analyzing can be overbearing. So, here is a short and sweet post about where to start.

Not everyone is a CPA, and knows how to calculate the feasibility of buying a mobile home over renting an apartment. So, it is important to keep things simple. It comes down to two questions you must ask yourself if you want to own a manufactured home. If so, you must qualify for a manufactured home loan? Click to apply now.

If you decide that you don’t want to own and live in a manufactured home, stop reading now. If you are interested in becoming a homeowner and investing in your future, then read on.

Does it make Financial Sense?

First, take your current rent and multiply it by 12 (months) and then multiply it by 20 (years), then multiply it by 1.25 (to loosely account for rent increases). Now you know how much you will spend on rent over the next 20 years, and have nothing to show for it. If your rent is currently $500 per month, then you will spend about $150,000 over the next 20 years.

Do you trust the Real Estate Market?

In this market, it may be difficult to see real estate as a sound investment. But if you look at the big picture, it has traditionally been very strong. However, even with the recent housing market slump there has been about a 100% increase in housing prices. This means that if your $500 rent payment was made towards a mortgage, you could have a home worth $300,000 after 20 years, rather than nothing.

Can you get Approved for a Manufactured Home Loan?

The financial market meltdown has certainly made it more difficult to get financing for a manufactured or mobile home. However, there are still lenders and brokerage firms that know how to get you approved. You do have to be a very low risk to the bank, though. You must have good credit, no bankruptcy in the past 4-5 years, a down payment of atleast 10%, and a verifiable income. Taking all of this into account a mobile home mortgage broker can configure your ratios, and you are on your way to owning your very own manufactured home.

Are Mobile Home Loans more Difficult than Real Property Loans?

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Mobile Home Loans

Many people are curious, or stumped, when it comes to the differences between loans for mobile homes and loans real property site built homes. A lot of lenders that finance condominiums and single family real property homes do not lend on mobile homes, and a lot of people do not understand why. Well, there are some big differences in the properties themselves, and these differences affect the types of loans that can be done on the homes.

Basically, when you are looking at getting a loan, you need to put down collateral for that loan. The collateral for your loan is going to be the main factor where there are differences between a Mobile Home and Manufactured Home Loan and traditional “stick built” home mortgages. Just like how getting a loan for your vehicle and getting a loan for your business are two different types of loans, so are loans for mobile homes and real property site built homes.

In the United States, a mobile home loan is also referred to as a “chattel mortgage”. Chattel mortgages are securitized transactions, governed by Article 9 of the Uniform Commercial Code. The lender on a chattel loan secures the loan with a mortgage over the chattel, or the Mobile Home. Because chattel is defined as personal property, movable or immovable, for example, a book, a coat, a pencil, growing corn, a lease, a mobile home is considered a piece of personal property that could, for all intents and purposes, be moved; often times mobile homes are considered as riskier collateral than a real property, site built home.

Traditional homes that are built on site and include real property are a bit different from chattel, or mobile home loans. A mortgage loan for this type of home is a loan secured by real property through the use of a Note, which is a document that evidences the existence of the loan. Real property mortgages can and should be additionally evidenced by a Deed of Trust document, which is recorded with the County Recorder. The Recorder is a county official that insures that instruments are recorded, giving public notice of such transactions. The Deed of Trust will be recorded with the County Recorder of the County where the real property is located. Because there is no real property ownership involved with a mobile home loan, a lender cannot record any documents against the title to a mobile home, to further secure the loan.

Mobile Home Mortgages are not recorded or secured in the same fashion as real estate, or real property loans. The title information for mobile and manufactured homes is maintained by agencies directed by The United States Department of Housing and Urban Development. In the State of California, The Department of Housing has “Registration and Titling” offices that are specifically assigned to maintaining the title information on Mobile and Manufactured Homes. The homeowner, or purchaser, of a mobile home shall be shown on the title as the registered owner, and the lender shall be shown as the Legal Owner to the mobile or manufactured Home. When a mobile or manufactured home is encumbered by a Legal Owner, the actual Certificate of Title to the mobile home is issued to the lender, or legal owner. The homeowner, or borrower, is issued a Registration Card, which evidences the homeowner´s Registered Ownership interest to the mobile home. With site-built, real property homes, the homeowner retains a Grant Deed to evidence their ownership in the home, and the lender maintains the Note and Deed of Trust to evidence their ownership interest in the real property home.

It´s helpful to understand these title and security differences, as they play a major role in determining the actual loan type, qualifying agents and the loan process itself. Manufactured Homes  and real property site built homes are not only built differently, but titled differently and mortgaged uniquely as well.

The True Origin of The Mobile Home

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Mobile Home Origins

So you think you know how Mobile homes came to be called such? Easy, Right? Because they can be moved from place to place, hence a home that is Mobile. Mobile Homes.

Well, this is actually a common misconception.

According to snopes dot com, “The origins of the mobile home are tied to the end of World War II. The rapid downsizing of the U.S. armed forces after the surrenders of Germany and Japan in 1945 brought back millions of servicemen (and servicewomen) to the United States from overseas in the mid-1940s, many of whom were coming of age and anxious to establish their independence, attend college, get married, and raise children. This demographic bulge, coupled with America’s burgeoning post-war recovery from the Great Depression and a wartime economy, created an unprecedented demand for housing — both for standard residential units and for quarters to accommodate the many servicepeople who were taking advantage of G.I. Bill benefits to complete their educations at colleges, universities, and other types of schools.

The widespread use of military-style prefabricated housing eased the severe housing shortgage temporarily, and the eventual creation of suburbs such as Levittown took care of much of the long term need, but neither of these solutions addressed a potentially lucrative marketing niche — people who were dissatisfied with living in barracks-like housing but didn’t want to (or couldn’t) wait years for the construction of affordable suburban housing. It was James and Laura Sweet, a couple from Prichard, Alabama, (a town just outside of Mobile) who came up with the concept that fulfilled that market niche.

James Sweet, a machine shop supervisor by trade, was reportedly finishing off his workday lunch one afternoon in January 1946 when a newspaper article about the post-war housing shortage caught his eye. What if, he thought, someone could manufacture a type of housing that could be put together cheaply and quickly at a central location, but was small and light enough to be transported to wherever the purchaser wished to locate it? Something like the prefabricated structures of the era, but much nicer and more home-like — a prefab housing unit divided into discrete rooms (rather than one large open space) with all the electrical and plumbing fixtures already in place. They could be built as one- or two-piece units, then loaded onto flatbed trucks and delivered wherever the purchaser desired.

Sweet’s wife, Laura, was a commercial artist who did illustrations for magazines, and she drew up a few simple floor plans according to her husband’s directions. James Sweet built a couple of prototype units in his off-work hours to prove his concept viable, and then, satisfied with the results, used the couple’s savings, mortgaged their home, and borrowed against his life insurance to establish Sweet Homes, a company dedicated to the manufacture and sale of prefabricated  homes.

National advertising was still something of a rarity in the 1950s, but as the new national highway system enabled the sale of prefabricated homes to spread outwards (mostly to the north and west) from the Alabama/Mississippi area, more and more consumers were exposed to the houses, liked them, and began clamoring for their own “Mobile homes.” Business boomed, more manufacturers entered the fray, and factories were established all over the U.S. to better serve local customers. Eventually whole communities of these types of homes were created all across the country, populated by homeowners who preferred them to more expensive and more closely-quartered suburbs full of site-built housing.

Over the years, however, as the generation who fought World War II aged and prefabricated homes became commonplace throughout the U.S., newer consumers were unaware that the appellation “Mobile home” was a geographic reference, a term coined in acknowledgement of the area in which the industry got its start. The name was more and more frequently rendered as a common compound noun (“mobile home”), leading many to mistakenly conclude that it referred to houses that were “mobile” — that is, movable from place to place. While “mobile homes” can indeed be transported, they are of course far from mobile — in the vast majority of cases they are never moved off the sites to which they are originally trucked. (Most “mobile homes,” once situated, are moved again only if their owners replace them with newer models, or if they have to be removed because the land on which they sit has been converted to other uses.)”

And now you know the true origin of the Mobile Home.

go to snopes dot com for further information and literary citations.

Mobile Home Loans in the Economic Recovery

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Mobile Home Loans in the Economic Recovery

In the current economic recession, it seems like the average American is able to afford less and less.

These unfortunate circumstances have placed affordable housing in quite high demand. It’s no surprise now that manufactured homes and mobile homes are paving the way when it comes to reasonably priced housing. With this increased demand, there will be more and more Americans living in factory built homes. As ownership of manufactured and mobile homes has increased, so has the demand for Mobile Home Loans.

At the introduction of manufactured and mobiles to the housing market, most of the average mortgage banks were uninteresed in offering Mobile Home Mortgages. Most mortgage banks lumped Mobile home loans in the same category with car or vehicle loans. Much like vehicles, manufactured and mobile homes were thought to quickly depreciate in value, unlike a traditional stick-built home or condo that typically sees equity gaining over time.

Due to the lack of equity appreciation, for many years it was improbable that a manufactured or mobile home refinance or equity loan would be made available to owners of factory built homes at all.
As time went on, home values skyrocketed faster than general income could keep up with. The depreciation of manufactured and mobile home owner’s equity started to slow down.  Eventually the equity losses  stopped altogether. Manufactured and mobile homes soon were actually increasing in equity, in part due to the increasingly superior quality and safety of manufactured and mobile housing, coupled with federal and state laws governing the factory-built process.  While mobile home owners invested in their homes and continued to maintain and improve them, they gained precious equity.

Today, rate-and-term mobile home refinance loans and cash-out equity loans have become readily available to eligible owners of manufactured or mobile homes. It has become reasonably easy to locate what was considered “non-traditional” and even undesirable financing for manufactured or mobile homes.

As the current real estate market begins to recover, the manufactured and mobile home market endures the same loss of value as the “stick-built” and condominium homes. In the midst of the recovery, manufactured and mobile homes still remain viable for financing at terrifically competitive interest rates. These loans should be eligible for rate-and-term refinancing in the not-too-distant future and perhaps even “cash-out” equity loans in the somewhat-near-future.
There was a time when a manufactured or mobile home loan was frowned upon as a mere “car loan”.
Those days have long passed as manufactured and Mobile Homes have emerged as the last affordable housing in America with competitive financing available to qualified buyers.