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socaldisneydude

Why are manufactured homes so difficult to finance?

socaldisneydude
16 years ago

My fiance and I live in Southern California where the current real estate prices are strating to calm down and stabilize but the price of a home is still unatainable to someone who only makes 50K per year. We have gone to a few manufactured home sales lots and have seen so many different makes and models that really convinced us that buying a manufactured home would be the way for us to go. Not only were the homes really, really nice but they were so affordable!

Well, we talked with several agents and one of the first things they ask is about our credit. My fiance has yet to establish any credit and my credit has taken a few very hard hits a few years ago due to some unexpected job loss. Needless to say our credit score was less than desirable. Once they find out that we don't meet the miniumum 700 credit score they tend to dismiss us like we were only wasting their time, which I'm sure we probably were.

I just don't understand why a person would need such a high credit score to buy a manufactured home. If I had such a score, wouldn't I be looking at real homes rather than manufactures homes? I was under the impression that manufactured homes were geared more for lower income individuals like us.

So perhaps someone in the manufactured home financing industry can answer my question. Why is it so difficult to finance a person with less then perfect credit?

Comments (40)

  • christopherh
    16 years ago
    last modified: 9 years ago

    First, will the home be in a park on a rented lot or on it's own land on a permanent foundation? That makes a BIG difference.
    If it's on your own property you should have more success in getting a regular mortgage.

  • bus_driver
    16 years ago
    last modified: 9 years ago

    If you had a substantial downpayment, the financing would be much easier. Simply put, once you have lived in the unit, it is a used mobile home. If you defaulted after a few months, the seller has not even recovered the cost of delivering and setting up the unit, and then is faced with the expense of moving the unit back to the sales lot and selling it at a loss. What about your history would convince anyone that this is unlikely to happen? The seller will sometimes continue to pay park rent for a few months and try to resell the unit where it is. The seller does not finance the unit, but the actual lender probably has a recourse clause that lets them recover from the seller (dealer) any losses incurred if you default and do not pay. So the seller (dealer) has a big stake in selecting those to whom credit will be extended. Having some savings gives buyers big advantages. You have more choices if you have some ready cash. Substantial cash reserves can be created by eliminating beer, cigarettes, sodas, bottled water, snacks, etc. Put that money in an interest bearing account.

  • socaldisneydude
    Original Author
    16 years ago
    last modified: 9 years ago

    So I would be better off buying my own land and setting the home up on a permanent foundation? That was something we really want to do rather than living in a trailer park. What kind of costs are involved with getting the land ready for the home?

  • christopherh
    16 years ago
    last modified: 9 years ago

    The costs are the exact same as a "regular" house. Lot clearing, well, septic, foundation, driveway, etc.
    When we had our modular set the costs were as follows.

    Lot clearing and hole for foundation: $12,000
    Foundation: $14,000
    Well: $3,500
    Septic: $2,500
    Driveway (100 ft): $2,000

    The cost of the land is of course not included.
    Up here an acre now costs about $60,000. But in other areas of the country an acre may cost $250,000

  • bigdee
    16 years ago
    last modified: 9 years ago

    Banks loan money at a rate based on risk. The HUD homes have cost banks a lot of money. A foreclosed HUD home will sell at a depreciated price. The history of foreclosures, storm damage, fires, structural damage and depreciation on mobile homes is much higher than site built or modular. The fact is HUD homes are inferior.if a person builds a home they are forced to abide by building codes. However a person can buy a substandard mobile home and the local inspection board cannot prohibit it because it is a HUD home and the Federal government CAN and does over-rule local building code. Accept the fact that mobile homes are junk and life will be easier. I spent my earlier years in a mobile home, it served a useful purpose as a stepping stone until I could do better.

  • christopherh
    16 years ago
    last modified: 9 years ago

    The fact is HUD homes are inferior.if a person builds a home they are forced to abide by building codes. However a person can buy a substandard mobile home and the local inspection board cannot prohibit it because it is a HUD home and the Federal government CAN and does over-rule local building code.
    **********

    This may be true where you live and it is true when purchasing a used mobile home. But up here ALL homes must meet Vermont specs in order to be sold and lived in. The Vermont specs always trump the HUD MINIMUMS. Hud may say 2x4 24" on center for exterior walls. But our specs specify 2x4 16" on center as the minimum. And most manufactured homes up here today have 2x6 16" on center. But in PA you can buy a modular from Shorten Homes in Scranton with 2x4 24" on center. Because Pa's standards are lower than Vermont's.
    Yes some mobile homes are pretty bad. But you gat what you pay for. And the purchaser of the "used" $200,000 double wide near us got a VERY nice home.
    State specs can indeed trump HUD specs. As long as the state specs are greater than HUD's.

  • bigdee
    16 years ago
    last modified: 9 years ago

    Christopher, you are wrong, this is the law. The intent of this law is to allow an owner to move his home to any state that he chooses to as long as it is placed in an area zoned for HUD.
    FEDERAL LAW ON MANUFACTURED HOUSING
    A. National Manufactured Housing and Safety Standards Act of 1974, 42 U.S.C. § 5401 et seq.
    The National Manufactured Housing and Safety Standards Act of 1974, 42 U.S.C. § 5401 et seq. (hereinafter, "the HUD regulations") provides a national set of safety standards and building codes for manufactured housing. It applies to the construction or manufacturing of all manufactured homes in the country and requires uniform standards with which all manufacturers must comply. It contains detailed construction standards regarding building materials, wind loads, utilities and systems, and so forth. They are, in sum, building and safety regulations, much like a building code.
    B. Preemption of Local Government Regulation
    The Federal Courts have repeatedly held that local government regulation of manufactured homes may not intrude upon the standards for safety and building of manufactured homes set out in the HUD regulations. They contain a preemption clause which makes clear that local governments may not impose restrictions on manufactured homes to the extent that they would conflict with or compromise the construction and safety regulations dealt with in Federal law.
    An example of how preemption works is seen in the case of Scurlock v. City of Lynn Haven, Fla., 858 F.2d 1521 (11th Cir. 1988). In this case, the city of Lynn Haven adopted a requirement that manufactured homes comply with certain local or state building codes. Failure to satisfy the building codes meant that a manufactured home was not permitted in the city.

  • socaldisneydude
    Original Author
    16 years ago
    last modified: 9 years ago

    I didn't sidestep the suggestion. The fact is that there is essentially NO money leftover after all bills are paid. Here is a breakdown of the bills I have to pay every month.

    Rent: 1300.00
    Truck Payment: 500.00
    Insurance: 200.00
    Utilities:75.00
    Mothly fuel cost: 160.00

    at the end of the month I have about 60.00 left for groceries. Needless to say I eat alot of cup o noodles and generic brand food.

    Now how exactly amd I supposed to save my money when I barely have enough left over to eat?

    and by the way i don't smoke or drink so I don't waste my money on those two habits.

  • bus_driver
    16 years ago
    last modified: 9 years ago

    I worked a second, part-time job for 28 years. We also lived, in 1963, in a place that rented for $15.00 per month. Certainly not fancy, but we saved about $60.00 per month by doing that. First rule to rise above poverty: Get married and stay that way.

  • bus_driver
    16 years ago
    last modified: 9 years ago

    To save, or to increase the rate of saving, one must increase income or decrease spending. It is best to do both. There is no other way to do it! That is an expensive truck! It is a depreciating asset! A cheaper vehicle, paid-for, could have only liability insurance and cut out about $650.00 per month of payments. Finding a rental rate of even $100.00 per month less would help, but I do not know your housing market. Spending all of one's income on payments each month dooms one to doing that for a lifetime. And a few missed paychecks (layoff, sickness) means serious trouble. I am just trying to help- these things worked for me!

  • christopherh
    16 years ago
    last modified: 9 years ago

    Bigdee,

    This is becoming a rehash of a thread that died a long time ago.

    You believe all manufactured housing is substandard and I do not. I know what is around here and many are VERY nice homes that INCREASE in value.
    So let's agree to disagree, OK?

    I'm gone.

  • marys1000
    16 years ago
    last modified: 9 years ago

    Stick to the point bus-driver. This is about manufactured homes not your moral views of household finances.

  • bus_driver
    16 years ago
    last modified: 9 years ago

    Ok, Mary. So the mobile homes are purchased with what? That brings us back to the original post. The folks want to buy a mobile home but cannot with their present financial situation. Your suggestions?

  • marys1000
    16 years ago
    last modified: 9 years ago

    This was the question
    Why is it so difficult to finance a person with less then perfect credit?

    You contributed part of the answer in your first post and bigdee's first post also contributed part of the answer.

    I assume its the same reason that used car interest rates are higher than for new cars - more depreciation and more risk.
    They're in California - I can't imagine living there on 50,000. Your suggestions one time were borderline ok trying to be helpful. To keep hammering on him is not. He hasn't posted his life biography here so you don't know all the facts. He shouldn't have to post his life biography. He asked a question about financing. Its not my place to question his truck payment. Or tell him what to do. On these forums its best to stick to the question.

  • bus_driver
    16 years ago
    last modified: 9 years ago

    So what are your suggestions in answer to the original post? Perhaps we all could learn from them since most of mine are not helpful nor useful. Explaining why does not really help change the situation. They want to buy a mobile home.

  • marys1000
    16 years ago
    last modified: 9 years ago

    As far as I'm concerned he didnt ask for suggestions.
    He asked why its hard to get financing for a mobile home with bad credit. Answer - because banks assume your a risk and because you have bad credit they have you over a barrel and know it. Yes if you had better credit you would look for a house, but you don't, therefore to get any kind of loan they can charge you more.
    IF he had asked - how can I improve my credit score - you give suggestions which is different than telling him to live his life the way you do. But he didn't. And BTW I've never been married and I have done pretty well. But he doesn't care how I did it, I wouldn't presume to tell him he should do what I did.

  • kzol
    16 years ago
    last modified: 9 years ago

    Now, I have to say, were I in the position of asking that question, I think tips on how to improve my credit score and/or financial situation would actually have been appreciated--certainly more appreciated than members appropriated my question to argue their differences of opinion...

    Having been a divorced, impoverished, single mother with a terrible credit score not so very long ago, my only contribution would be to suggest that expenses can almost always be reduced and income almost always increased if you're willing to be creative and make compromises. A manufactured home can be a great compromise to a stick-built home, especially if it allows you to live within your means.

    Benefits of having bad credit:

    1. It forces you (hopefully)to live within your means, unless you fall victim to predetory lending practices.

    2. Nobody WANTS to steal your identity!

  • bus_driver
    16 years ago
    last modified: 9 years ago

    Chapter one of the book.

  • psudodrew_yahoo_com
    15 years ago
    last modified: 9 years ago

    1. Consumers are "upside down." Unlike real estate, which usually gains value, mobile homes lose value over time. They depreciate like cars. Thus, the trailer can wind up at zero value when the consumer still owes thousands of dollars.
    2. Mobile homes are not considered good credit risks. Most mortgage companies won't write loans on mobile homes. Therefore, there is less competition and consumers are more likely to get a bad deal.
    3. The interest is paid back first! Many mobile home buyers don't realize that, like all mortgages, they will pay back virtually all of the interest on their loan before the principal goes down.

    Combine all three of the above and it's apparent that taking out a big loan over a long period of time on a mobile home is almost certainly to end in grief. You should only consider buying a mobile home if you can afford to pay a large amount of the purchase price in cash and finance the rest of the purchase with a traditonal personal loan, rather than a secured mortgage.

  • gemmy1
    15 years ago
    last modified: 9 years ago

    I would call a Clayton Manufactured Home Dealership. They have their own financing in place. They build 2x6 exterior walls and are very nice. I use to sell Clayton Homes and they are not just for low income or bad credit. I sold homes to very wealty people. I have had both. I built a a home lived in it 10 yrs sold it and bought a Clayton Home and love it. In the state of Az manufacured homes are real estate and keep up with the current market as long as it is on private property and not in a park. As you can see site built homes have depreciated as well.

  • countryboymo
    15 years ago
    last modified: 9 years ago

    A mobile home in good standing and in good shape can gain value in some instances but it is more common for them to hold even if taken good care of. What the lenders are afraid of is the risk and it is huge. IF a mobile home is defaulted on they drop like a rock in value. On a modular or stick home or anything that is a permanent part of a lot or land that is foreclosed on will not drop near as much value. It is a huge loss if a mobile home is defaulted on. I purchased a 1991 Champion Atlantic 16x80 used in 96 for 21k and had 28k in it by the time I was moved in. Lived in it till 06 and sold it for 14,500. My base payment was 240 a month for 3 bedrooms 2 baths with 2x6 walls vaulted ceilings and shingled roof. Did I lose money in my investment? Yes, was it better than renting? Very much so and now I have a new home with a full basement. They have their place and they in some instances and areas do appreciate in value.
    My MH was appraised at 18,000.00 at the time I sold it for 14,500 but I wanted to get it sold so I took the hit. So by value I had lost 3,000.00 in value over 11yrs while making a 240.00 house payment! For a single guy you can't get any better living for the money. I loved it.

  • lippysyd
    15 years ago
    last modified: 9 years ago

    Quote Kzol:
    Benefits of having bad credit:

    1. It forces you (hopefully)to live within your means, unless you fall victim to predetory lending practices.

    2. Nobody WANTS to steal your identity!

    LOL, so true! Not to mention that the current recession is less of a shock. Meaning that while others are having to learn to do with less, those of us with bad credit already know how to do that.

    Bad credit stinks, but there really is a bright side to everything.

    Here in Michigan I was told once that the problem with financing MH's is that if they have their wheels the loan you get is basically a really big car loan, since it has a vin #. But if it's on a foundation (crawlspace or basement) you can get an actual mortgage. Of course this could be totally off, but at the time it made sense to me.

    Socal, I'm in the same spot as you, so I wish you luck!

  • dissident
    14 years ago
    last modified: 9 years ago

    We are in a completely different era now with real estate. The ones that appreciated the fastest are now going to depreciate the fastest. I fully expect that housing prices adjusted for inflation could go down to historical norms or lower due to the glut of houses on the market. What goes up WILL come down.


    So during this economic climate, buying something cheap and saving money will allow one to upgrade down the road for less money. Historically speaking houses keep up with the rate of inflation, they don't become slot machines that provide easy money. Those days are over.

    A manufactured home could be a good choice, but I would only do it if you get it really cheap and old, like under 10k, or you just buy one already on it's own lot.

    I bought one built in 2003 on it's own .65 acre lot with a newly built 2 car garage and got a very good deal.. the parent bought it for the kids who divorced and left, now the parents are selling it. They weren't looking to make a huge profit or anything, so I got a deal.. a nice home, garage, land, for one times my annual income.. I'll have it paid off in 2 years max, and can then save money for the time traditional real estate prices come back down to planet earth, not to mention property taxes.

    I've always been someone who prefers something small and energy efficient though... many of the houses built in the last few years are simply too large with too much square footage, which drives up property taxes and heating costs.. I simply wouldn't want to buy one. An older house, or perhaps a modular on a basement might be better in my case... though older houses are pricy to heat, they are built well for the most part.

  • erinsbee1
    10 years ago
    last modified: 9 years ago

    I really wish people would use correct terminology. When someone asks why financing a manufactured home is so difficult I do nt think the respondents need to start calling it a mobile home. The term mobile home is no longer used...they are manufactured homes. We own one,in Michigan and are trying to sell it right now. It is on a perm poured concrete full daylight basement, on 13 acres, 5 bedrooms, Renovated kitchen brand-new appliances cabinets flooring bathroom remodeled glassblock radiant floor heating soaking tub...heated 30x40 garage/ shop, 16x 20 hay barn, outdoor riding arena, wooden round pen, back 5 acre asture, front paddock with loafing shed, four season water pump..the list goes on and on. anywhere else this would be way more than what we are asking.100x150 trails, hunting, had two offers but people are saying they can't get financing. I tend to think the banks are telling them not to buy a "doublewide". Absolutely crazy thinking to me. They should be allowing people to buy affordable homes like mine so as to get the market up for manufactured homes. But what they are doing is the opposite..causing people like myself to not be able to sell our gorgeous property. Moving to west palm beach, husband already moved there,,transferred for his job,, so I'm stuck trying to sell my horse farm.

  • cathyyg
    10 years ago
    last modified: 9 years ago

    You seriously think a 5 bedroom doublewide on 13 acres, with outbuildings, pastures and trails for being a horse farm is an "affordable home" in Michigan right now? Beautiful Victorians 100 to 135 years old in old established neighborhoods are selling for 50k to 110K.

    You have well over 100k of value in land alone, I am betting, and I would be amazed if you are asking under 250K for your property. Maybe 500K. Not many people want a horse farm, and even fewer can afford one.

    Try advertising in a magazine geared to homesteaders.

  • cathyyg
    10 years ago
    last modified: 9 years ago

    More helpfully: have you got the Certificate of Permanent Affixture and had it recorded on the deed to the land? This makes it real property and not a manufactured home anymore.

  • mat77084
    10 years ago
    last modified: 9 years ago

    I have been trying to purchase a 4 bedroom mobile on 14 acres. NO one will finance it. I wish real estate agents would tell sellers that they have to have a permanent foundation before they can sell it.Unless you have CASH there is no way to purchase this kind of property. Believe me I have done the home work. Also I found out that the mobile has to be 60% of the value of the land. If it's not you can not finance it. I even tried to buy it for land value only but that has to be a hard loan which has a lot higher interest rate. Go figure. I am at a stand point here. I think that even if the seller puts a permanent foundation in loan companies will have another excuse not to loan on such property.

  • ryseryse_2004
    10 years ago
    last modified: 9 years ago

    If you buy a modular instead of a manufactured home (at least in IL) it is financed exactly as a stick built home since it is basically the same thing. The fact that it is stick-built in a factory is a real plus because you don't have the settling problems over time that you have with a home built outdoors on a foundation.

    I have owned both and definitely recommend a modular.

  • cathyyg
    10 years ago
    last modified: 9 years ago

    Ryse, I fail to see how a modular house is going to stop a foundation from settling. Be that modular house on a full basement, a flat slab, or on piers that foundation is going to settle and the house with it. Weight on dirt does that, no way around it except building footings that reach down to bedrock. And that is cost-prohibitive.

  • Widevariety
    10 years ago
    last modified: 9 years ago

    Ok, it seems as if everyone is giving HALF or PARTIAL answers... I'll attempt to explain it in baby steps:

    #1. A Manufactured Home built after 1976 is considered "PERSONAL PROPERTY" aka "Mobile Home" if it is NOT placed upon an actual foundation and is not recorded on the land deed... So if you build a foundation and own your land and put them together on one deed, then it is considered REAL ESTATE in all 50 states. If it's on blocks, or just sitting on stilts, it's considered a mobile home, (REGARDLESS OF HOW IT'S CONSTRUCTED)

    #2. Manufactured Homes and Modular Homes are built almost exactly the same way... both are built in a factory, both are built using 2x4 studs or 2x6 studs, BOTH can have all the same amenities as a home that is being STICK BUILT out in mother nature and they both can be built to the same standards as a stick built home... the difference between the two is that a modular home means that it is built in multiple sections, where as a manufactured home can be one section or many sections, but a modular home is rarely ever just ONE SECTION

    #3 The question was asked "why is it so hard to get a loan for a mobile home" The factors that are at play are:
    -Buyer's Income
    -Buyer's Debt to Income Ratio (which looks like the biggest issue here)
    -Credit History
    -Price of the Mobile Home/Manufactured Home
    -Down Payment or equity in Land Owned

    To answer the question, one has to take all of these into account... the first step in qualifying for a loan is to look at the debt to income ratio... If they are spending more than 40% of their income on other bills, then they are NEVER going to qualify for a loan of ANY type... it's just the way lending works... So if their debt payments are $1500 a month, with these guidelines, they would only be able to purchase a home that would not exceed $350 a month in payments. Now at that payment, you would only be able to purchase a home (regardless of regular, mobile/manufactured or modular) that would not exceed $35,000 in cost. That would be the total amount of your LOAN, not the total cost of the desired building and property... we're talking permits, surveys, land work, septic systems, well's... the whole 9 yards... permits ALONE can cost more than $30k in california...I recently moved from there for that VERY reason... so if you are looking at a home that is over $100,000 with an income of $50k a year and you have debt, its going to be next to impossible to get a loan from ANYONE.

    Unfortunately lenders don't care very much that you are paying $1300 a month in rent. That's not a good indicator of credit-worthiness. It's the debt to income ratio that is the killer there.

    There ARE programs in California in certain cities that will help you purchase a home with your past credit history and with your income, but it's not going to be an easy thing to do... they want you to go through their special program to evaluate you and see if you are able to meet the requirements that they place upon you before they will help you with down payment assistance, state funds, etc, but they are there. You might want to consider a CALHFA type of loan or one of the urban development loans that many cities are offering if you move to their small town (unfortunately they are usually out in the boonies)

    In other states, the requirements are not as harsh and don't have as many permit related expenses, so it might be easier to qualify.

    I will say though, that someone did mention your current debts. I know from firsthand experience because I used to ALWAYS have a car payment and I never seemed to OWN my own vehicle... you never get ahead that way unless you make more money and don't upgrade your car... If you were able to make some sacrifices where your money goes, by looking into trading your Truck down to something less expensive-preferably something that you could save up for and buy for a couple grand, then that would be the biggest improvement to this whole equation and might help you qualify.

    As far as the quality of a home goes... manufactured homes can be built with the same exact specs as a brand new stick built home... so anyone's arguments otherwise are incorrect.

  • christopherh
    10 years ago
    last modified: 9 years ago

    Close, but no cigar.

    Manufactured homes have the frame as part of the structure, and modulars do not. Modulars are designed and constructed to be trailered to the site and craned onto a foundation. They are meant to be exactly like a site built home. There is no title.

    The dealer nearby has a wide selection of manufactured homes. Single wides, double wides, ranches, capes, and even a log sided cape with a 8/12 roof pitch. But they all have the metal frame as part of the construction.

    Where I live, modulars are the most common form of construction due to the short building season. It can snow on Columbus Day and as late as Mother's day.

    A few years ago I was looking at refinancing options. each and every company I looked at said they would not give equity loans on manufactured homes. It made no difference whether or not it was on a permanent foundation. Personally I didn't feel that was right, but those were their rules, not mine. They would finance the home like a regular mortgage if it was on a permanent foundation, but not give equity loans.

    Don't get me wrong. There are some very nice manufactured homes around here. Before the crash, a double wide on a foundation and property sold for over $200,000.

  • brnincalif
    10 years ago
    last modified: 9 years ago

    Sitting here drinking my coffee and this post caught my eye. As the owner of a manufactured home I had to reply about the equity thing christopherh spoke of. There are to many variables to state you cannot get a home equity loan. I live in Indiana and bought a foreclosed DW on 3 city lots with a full poured basement and 2 car garage. I paid cash for it so not sure about how difficult to finance it would have been originally. But decided it needed so much updating that I took out a home equity loan with no problem. It appraised for about 3 times what I paid for it one year later. So there are so many different circumstances here that one cannot say, that you CANNOT do this or you CANNOT do that. Each circumstance may or may not work out.

  • Guy954
    9 years ago
    last modified: 9 years ago

    Mobile homes depreciate and fast. Even if you own the land the home itself still comes down in value. And if you buy one for $50K be prepared to live in it for life. Whoever buys from you will have to have the cash on hand because banks won't lend them money to buy your home and if you rent a lot what you own is a debt if ever increasing lot rents and property managers that tell you that you have to follow the rules, while you see neighbors breaking them and they are ignored.

    They don't allow pit bulls here. I've seen 2, One may have been visiting.

    They don't allow boats or trailers in the parking lot, I've seen both,.

    They don't allow you to park on the street or grass. In fact nurse Rachet came around one day and put a notice on my friends car to move it or be towed when I had friends over the 3rd time in a year.

    So I ask why the people across from me were allowed to have young people who parked 2 cars on the street. She lied and said that it was because they were being evicted. So why are my other neighbours allowed 2 park 3 cars on the street for a total of 5 cars? She says they are in rh process of moving. yeah right.

  • christopherh
    9 years ago
    last modified: 9 years ago

    For anyone who believes manufactured homes are trash, here's a listing in Pennsylvania for a 3 BR 2 bath home in a community of like homes. My sister in law lives in this 55 and up community.

    They bought the house they live in with proceeds from their last home, and took out a reverse mortgage on the balance. They have no kids so they have no worries about leaving the home to somebody.

  • bettybe209
    8 years ago

    We live in the northern part of Arizona. My husband and I our credit score is kinda okay. So we looked into Clayton Homes. They asked for 8,000 dollars down on our own property. We bought 2 acres for 7,000 dollars and we were in shock. We hired the local construction company in town to build our home for only 40,000 dollars. It was well worth it. It's always good to asked the City Manager or Mayor for property that is up for sale and ask for local construction companies. People are hurting for business in small towns and they are willing to work with you. Our home is 2 bedroom, 2 bath, living room, family room, kitchen, dining room, laundry room, mud room and 2 car garage. Don't fall for Clayton Homes or any modular home. Let someone build your home.

  • Christopher_H
    8 years ago
    last modified: 8 years ago

    I live in a modular home and I'm happy you like your home, but I love mine. Modulars are very popular here because of the short building season. And I'm quite sure you know modular and manufactured are two different things.

    I'm happy you found a 2 acre lot for 7K, but 2 acres around here in VT is $30K to $100K depending on the town.

    I wish you nothing but good luck in your new home.

  • Debbie B.
    8 years ago

    Once more I must agree with Christopher. Land prices, construction prices, laws, regulations, permits, etc. vary widely state to state, and sometimes even county to county, or city to city. Similarly, stick built, modular, and manufactured homes all vary considerably in price, quality, and finance-ableness. Does anyone remember the movie "The Money Pit"? If I remember correctly, it starred Tom Hanks and Shelly Long. The comedy revolved around the trope of a naive couple who think they're getting a killer deal on a beautiful home--a stick built home. But once they move in, the house starts falling apart and they have to sink more and more money into it. It's funny because it's true--most of us, if we haven't experienced it ourselves, know someone who has. In the last stick built home I bought, in 1995, I think it was, we had multiple problems after moving in. I was cleaning a bathroom one day and my son started pounding on the door yelling, "Mom, it's raining in my bedroom!" Turned out there was a length of pipe completely missing! None of the roller drawers worked correctly. The sprinklers in the front yard watered the sidewalk rather than the grass (the contractor put in the front yard as part of the purchase price). And about ten more things. We had to sue the contractor to make him fix it all. That, along with holding back $2,000 in escrow, was the only way to get him to make things right, and that's the only reason we didn't end up with a "money pit."

    My point is, no one can state categorically that one type of home is always better than another. There are examples of very shoddy homes in all three types of houses, and there are examples of beautifully built houses in each.

    People buy manufactured homes for many reasons. I see in this thread that some people only see it as a stepping stone to a "real house" as one poster called it. Many people who are retiring sell their stick builts and buy a manufactured home for several reasons: they can pay cash for the MH and have money left over to travel or to live on. A smaller home needs less maintenance. If they put it in a 55+ park, the park may take care of the lawn. And some seniors enjoy the social activities of such a park.

    Where I live, in eastern Washington state, MHs indeed have been going UP in value. This is because wages are low, and unemployment is high. Many people can't afford a stick built, thus demand has risen dramatically for MHs, even used ones in a park. And when demand rises, prices do too.

    I bought my MH because of my somewhat unique situation. I bought a junker, an old 1979 SW for $2,000 cash. Over the next three years or so I'm going to sink around $30,000 into it and refurbish it from top to bottom. I have an academic grant whereby I get several thousand dollars three times a year. So I'll do a major project three times a year and pay for it with cash. I'll continue to live within my means on my fairly meagar income. My house will be beautiful and strong and will last at least fifty more years. I don't care about getting my money out of it, because I'm going to live in it for the rest of my life and then leave it to my daughter.

    I liked the advice from bus_driver. The OP actually DID ask for his advice, not in the original post, but in a follow-up. He laid out his monthly budget, then asked, "How am I supposed to save money on this budget?" Therefore, it was entirely appropriate for him to respond to the question that was directed to him. He, and a couple of other respondents were correct in stating that he (along with a substantial number of Americans) need to increase income and decrease expenses. I've never had a car loan. I drive a 1999 Ford Windstar minivan. I will drive it until it drops. Then I'll buy another car for cash. And drive it until it drops. I currently live in a house on my university's campus with eight other women. My rent is $365 per month. And I don't buy stuff. I buy food, gas, toiletries, and medication, and things necessary for my work. I rarely buy clothes--I haven't bought new clothes in the last 15 months. And when I do buy clothes, 90% of it is from thrift shops. I have to buy special shoes due to my disability, but I wear them for a very long time. I go out to eat maybe three or four times a year, and I never, ever buy fast food. I don't have cable TV (or a TV). My daughter and I go to a movie on Christmas.

    But if you think my life is squalid and empty, you're wrong. My university has tons of lectures, concerts, dance performances, athletic events, etc., that I can get free tickets to. In the last couple of years, I've seen Bishop Desmond Tutu, the Dahli Lama, Jane Goodall, President of Liberia, Mrs. Greenleaf Sirloff, and David Brooks, among others. I've been to champion basketball games, and musical performances, plays, etc., that would knock your socks off. And I recently returned from a year in Zambia, where the experience of another culture was life-changing. Universities all over charge the public nominal fees for outstanding events and performances. And many cities have science centres, museums of history, and other events that are free or low cost. When Neil DeGrasse Tyson had his mini-series a couple of years ago, our local science centre hosted a viewing each week, followed by a short lecture and Q&A session with scientists who are experts in whatever the theme of the show was--and it was free. Check out your local high schools for plays and musicals; okay, they may not be up to Broadway standards, but they are still a lot of fun for a fraction of the cost. And don't overlook your public library! Besides being able to check out everything from the latest bestsellers to very technical stuff, you can check out movies, use the Internet for free, and print stuff out for free (at my library I can print out 75 pages a week free!). They also often have free events of all kinds. My point is, you can save a lot of money but still have a lot of fun and interesting things to do.

    I recently read that 75% of American families eat out at least three times a week. That's fine if you have no debt and the income to do that and still save money. But that is not the case for most people. And the worst part of it is that most of them put it on a credit card! I don't believe in credit cards. If you only make the minimum payment every month, you could end up paying $500 for that $70 dinner!

    i have tons of great friends and we get together all the time. We just don't do it at restaurants. I can cook at least 25 meals for my friends for the cost of taking them out once. And we go out, but to the types of events listed above.

    And back to the OP's original question. Mobile/manufactured homes are a little tougher to finance, especially older ones, for all the reasons other posters have delineated. But the OP's problem isn't that MHs are somewhat difficult to finance. His problem is no one will finance him for anything other than a vehicle because of his current (or current at the time of his OP) financial situation. A poor credit rating and his debt to income ratio, and not having anything to put down on it, are the triple whammy. I would advise him, and anyone in his situation, to take a second job if possible, trade in the truck and buy something for cash, and get his credit rating up over time. I don't live in SoCal, so I don't know if his rent is reasonable, but if he could find something even $100 a month cheaper, that's still safe, I'd advise him to do that too.

    Anyway, these are things that have worked for me. Each person's situation is unique, and I recognise that some things that work for me may not work for you. And you may have some money saving ideas I haven't thought of. I would not presume to tell anyone how they should spend their money. I have no moral judgement on that--spend it however you want, as long as you adequately provide for your children. I'm only saying, in response to the OP, if your goal is to buy your own house, then this is the advice I would give you, or anyone else who asked. You are perfectly free to take it or leave it with no offence whatsoever taken on my part.

    And, of course, many buyers of MHs are far more well off financially than I am, although everyone has to live within her or his means. And everyone should have a savings account, in my personal opinion. But not all MH owners or want to be owners have the limited resources I have, and more power to them! I'm definitely not trying to perpetuate the myth, and it is a myth, that all MH owners live in poverty. That is certainly not the case! In fact, I would dare say the majority of MH owners are in the middle to upper middle class, and some are in the upper class.

  • cuppacoffee3
    8 years ago

    Hey I have a question. Why would the current rent be factored in with your debt to income ratio ? I mean,, you will be using that portion on the payment. ( in place of the current rent) . Thats why owing is better to do, right? I was wondering this

  • Debbie B.
    8 years ago

    Hey there, cuppacoffee3! Just happened to see your question. I hope someone will correct me if I'm mistaken, but I THINK the commenter, widevariety, was answering to an argument that wasn't actually made in this thread, but oftentimes IS an argument that people who are turned away from home loans make. That argument goes something like, "Well, I'm making a $1,300 rent payment every month, so that proves I can handle the mortgage payment on this house that is even lower than the rent I'm paying now." That may or may not be a valid point, but what widevariety was saying, and she or he was 100% correct, is that loan officers do not take that into consideration when assessing a loan application. Your current rent, no matter what the rent is and how many months (years) in a row you have made on-time payments, counts for NOTHING when applying for a home loan. It's still very important, however, if you are applying to another rental situation, be it an apartment or a house rental, so you should always pay your rent on time. Does that make sense? I hope that helps! :-)

    Ill just add that the loan officers will be factoring in what the NEW MORTGAGE payment will be in terms of income to debt ratio. In the case of the OP, they would look at his income, his other debt (the truck), and whatever his mortgage payment would be if they gave him the loan at such and such a price (interest). If the income to debt ratio is above a certain number, it's a no-go on the loan, even if he is paying more right now in rent. I remember when we bought a house in Sacramento in 1987 or 88, our mortgage lender at the time said for their company to finance someone, the monthly mortgage payment couldn't exceed 33% of their take home pay. Lending rates and rules are partly determined by federal banking/lending laws and partly by the individual banks and other lenders. And we saw in 2008 what happens when the banks get to make the rules.

    After just re-reading my previous post, I feel like I should say something, because I think my previous post could easily be taken as me being on my high horse. So let me apologise and say that I have absolutely no moral high ground on which to stand here. Yes, I'm debt free and live within or below my means NOW. That has not always been the case. I've made every financial stupid mistake in the book, and only FINALLY figured things out when I was about 40! Long story short, when I got divorced in 1998, we were over $100,000 in credit card debt alone! We lost our beautiful house, my car was repossessed, and we declared bankruptcy. Two years later, I was 40 and homeless--literally, as in sleeping on the street and in homeless shelters. I finally took it upon myself to learn about household budgeting and finances. The only thing I had known before was if you're out of money you just get another credit card. That was no longer an option for me. I have spent the last 15 years since then CRAWLING out of the pit of poverty that I put myself into; I have no one else to blame. I have not taken one dime from the government in terms of welfare or anything like that. I've worked my fingers to the bone, and I will say others have helped me from time to time. I run my own business, and since 2007 have also been in college full time. I'm writing my dissertation now, and will get my PhD in two more years.

    Because of my back story I felt compelled to write in response to the OP, because if I can save any young person from making the mistakes I made, I would want to help that person. If it came across as me sounding superior, I truly apologise, because it's quite the opposite--I can't imagine anyone making worse financial decisions than I did for the first 40 years of my life.

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