If you’re currently renting but intend to buy your own place any time soon, a manufactured home might be your best option for affordable housing. Although owning a home may seem like an almost impossible dream nowadays, buying a manufactured home isn’t only less expensive; it also makes financial sense. Here are three reasons why we think that buying a manufactured home is a wise financial decision.
Manufactured Homes Are Less Expensive to Build, but Appreciate in Value
The average sales price for a manufactured home is typically lower than that of site-built construction. The price reduction results not only from the fact that manufacturers purchase high volumes of materials and build these homes in factories, under controlled conditions, but also from the fact that manufactured homes offer buyers more flexibility in choosing a location.
Compared to an existing home that is located in a neighborhood with numerous amenities, which can significantly increase the sales price, for instance, you can choose to place your manufactured home on land that you already own, on land you rent, or in a land-lease community.
Additionally, if you already have enough money for a down payment on a manufactured home, putting it into a bank account would never bring you the same return as if you bought a manufactured home. Manufactured homes define a type of asset that appreciates with inflation (particularly home-land properties), in a manner similar to comparable site-built construction. Currently, the interest you can earn in a savings account is much lower than the rate of inflation. Furthermore, you’ll have your own place to stay, which means that you no longer have to cover uncontrollable rent increases.
Manufactured Homes Give Buyers Peace of Mind and Financial Security
Buying a manufactured home brings you peace of mind and stability, just like a traditional home. Besides knowing the monthly mortgage payments that you need to make over a fixed period, you will have your own place that you can renovate and upgrade the way you want.
Also, because a manufactured home is less expensive than a traditional home, you’ll need to take out a smaller manufactured home loan. A smaller loan translates into fewer monthly payments and a lower amount of interest. Not to mention that a more affordable home also means that you’ll spend less on property taxes and insurance premiums. Considering that modern manufactured homes are energy efficient as well, they often cost less to heat and cool compared to existing site-built homes.
PMI- When you obtain a manufactured home loan you will not be required to pay PMI (Private Mortgage Insurance).
When it comes to handling finances in a lucrative manner, there are two other advantages associated with buying a manufactured home. First, you will live in your manufactured home “for free” after the loan is paid off. Second, you can rent out your home to tenants if you ever decide to buy a second home. Manufactured home ownership also brings a series of tax benefits in the form of deductions.
You Can Add Value to Your Manufactured Home and Use It as Collateral
There are many different things you can do to add value to a manufactured home. For instance, you can opt for different home upgrades, such as eco-friendly features, room additions, garages, decks, sheds, etc.
By choosing certain home improvements that can increase your home's value, you will have more equity in it. This means that you can qualify for a home equity loan sooner than expected or get approved for a higher loan amount. Although getting a home equity loan for a manufactured home can be difficult, there are nationwide manufactured home lenders who are ready to offer you a traditional home equity loan or cash-out refinance.
So, just to recap, buying a manufactured home is a wise financial decision for the following reasons:
- Manufactured housing has lower building costs and sales prices;
- Homeowners need to take out smaller loan amounts, which involve less financial risk;
- Manufactured homes tend to be less expensive to maintain than traditional homes; that results in smaller monthly household budgets;
- Compared to renting, manufactured home ownership provides more economic benefits over the long term.
To find out if you qualify for a manufactured home loan, with or without land, or a home equity loan, please get in touch with Triad Financial Services today!