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| 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? |
Follow-Up Postings:
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- Posted by christopherh (My Page) on Tue, May 22, 07 at 7:01
| 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. |
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- Posted by bus_driver (My Page) on Tue, May 22, 07 at 8:20
| 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. |
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- Posted by socaldisneydude (My Page) on Tue, May 22, 07 at 17:23
| 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? |
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- Posted by christopherh (My Page) on Wed, May 23, 07 at 6:55
| 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 The cost of the land is of course not included. |
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| 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. |
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- Posted by bus_driver (My Page) on Thu, May 24, 07 at 13:09
| I noticed that the SoCal person sidestepped my suggestions. I lived in a small mobile home (500 square feet) (paid for) and we needed more room. Had been saving all the money possible. Started looking for a lot to build. Everyone turned me down- property not for sale. Local fellow got in big trouble with far too many things bought on credit- with monthly payments. House, car, truck, TV, pool table. travel trailer, boat, etc. Offered to sell me his house for about market value. Wife did not like the house, so I declined. Two weeks later he came back with lower price for his equity with assumable mortgage. I paid him $2500.00 and we moved in. No loan fees, no closing costs. Just took over the payments. Wife still did not like the house but liked the price. Within a month, two of the lots I wanted to buy earlier became available and I bought both of them- for cash. Sold my mobile home for $2100.00- it was nice, but small. That re-established my savings. Some years later, 30 acres adjoining our place became available at a reasonable price. I bought it the next day- for cash. Having some savings gives one many opportunities, choices, and freedoms. Having debt is enslavement. |
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- Posted by christopherh (My Page) on Fri, May 25, 07 at 7:20
| 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. |
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| 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. |
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- Posted by socaldisneydude (My Page) on Fri, May 25, 07 at 16:28
| 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 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. |
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- Posted by bus_driver (My Page) on Sat, May 26, 07 at 8:35
| 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. |
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- Posted by bus_driver (My Page) on Sat, May 26, 07 at 21:13
| 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! |
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- Posted by christopherh (My Page) on Tue, May 29, 07 at 7:46
| 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. I'm gone. |
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| Stick to the point bus-driver. This is about manufactured homes not your moral views of household finances. |
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- Posted by bus_driver (My Page) on Thu, May 31, 07 at 7:54
| 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? |
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| 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. |
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- Posted by bus_driver (My Page) on Thu, May 31, 07 at 11:35
| 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. |
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| 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. |
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| 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! |
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- Posted by bus_driver (My Page) on Tue, Jun 5, 07 at 7:35
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- Posted by chrissy(psudodrew@yahoo.com) onThu, Jun 19, 08 at 17:46
| 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. |
Here is a link that might be useful: almost a certainty that a 30 year loan will outlast the trailer
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| 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. |
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- Posted by countryboymo (My Page) on Sun, Jul 20, 08 at 15:32
| 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. |
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| 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! |
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| 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. 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. |
Here is a link that might be useful: youtube - housing prices
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