Is Now the Right Time to Buy a Mobile Home?
We have talked to a lot of people looking at mobile homes who are not quite ready to pull the trigger on buying the home because they are honestly scared about the future. We understand being scared, after all, we are living with COVID-19 right alongside of you.
Since we sell mobile homes, yes, we have a bias, but we tried to set our bias aside to write this post. Our team becomes friends with a lot of our customers, and the last thing we want to do is lead a friend into a bad decision.
We also can’t take every scenario into account, so we are going to share some samples of when to say yes, and when to say no.
Do You NEED a home?
This may seem like a silly question, but there are situations where people just need a home. You might have people moving in such as your new baby or an elderly relative or somebody else that makes your home to cramped for comfort. You may have moved in from out of town. If you need a home and can afford one, then, yes, look for a home.
If you don’t NEED a home, then go on to some of the next options and think about whether or not you want to buy a home now.
Is Your Job in Jeopardy?
If you are afraid the amount of money you earn from work is about to cut down to a trickle, now is not a good time to buy a home. You may wonder if you are going to lose your job or there may be talk of a huge cutback in hours. Regardless, the last thing you want is to be looking at homes in a time when you are stressed because of aoss of income. Sit tight.
If your job is secure, then now is a good time to look for a home. Prices will only go up in the future, for rent, for homes, for everything. Once you buy a home, the loan payment will be the same for the life of the loan and in the end, your loan payments will be done!
Do You Have Okay Credit or Will You Buy the Home for Cash?
If you have all the money you need to buy a home sitting in the bank, you are golden, and you should be fine. Credit scores over 650 usually can get affordable interest rates without giant down payments. If you fit in either camp, we say “start shopping.”
Mid-range credit scores can often get a loan, but the bank will look at other factors closely. Most folks with mid-range credit scores will not have too many issues getting a loan, so we normally suggest shopping for your dream home if you are in this group, but be sure to let a sales rep know about your credit score, because lenders change their lending thresholds from time-to-time.
Also note, if you are in this credit score range, lenders will likely look for a larger minimum down payment than the first group. You will want to have 10-20% of the home’s value either in the bank or, if you own your own land, you may be able to use the value of the land as your down payment.
If you have a credit score at 499 or below, you will likely want to work on raising your credit score first. The reason is, lenders will still potentially loan you money, but the down payment may be as high as 35%, and the interest rate may be higher than you want to see. We recommend visiting the helpful folks at Next Step to help you get your finances ready to buy a home (and no, we don’t get anything from them for the recommendation, we just know a lot of people find them helpful).
You can also find out more information on buying a mobile home with bad credit.
How Much Time Until You Need to Move?
If you have 15 days to move, it is highly unlikely anyone can get you into a new mobile home, a used home that needs to be moved, or any home that requires a loan.
If you are buying a home that is immediately available from a dealership, you can normally get one delivered in less than two months, assuming you already have the place to put the home available. If you don’t need a loan, the home is already built, and the land is ready for the home, you can move into your new home in just a few weeks.
If you are buying a custom home direct from the factory and you already have a place to put the home, the process is normally closer to 3-4 months, but that time can vary depending on how many homes are waiting to be built before yours at the factory, so check on current wait times.
If you have no idea where you want the home delivered, it depends on you. We have seen some people finish the process pretty quick, while others take 6 months, while other take…well, let’s just say, a really long time. Usually, the process goes smoother if you find where you want the home before you choose the home you want. If you don’t know where you will put the home, you may want to start with finding land or a mobile home park first.
There are other things that can delay the process such as getting permits in some cities take longer than others, bad weather delays deliveries, and it takes a long time to approve a loan if you are slow at getting us the required documents.
Do You Rent?
There are a few benefits of owning a home over renting, so we like to recommend those who rent to look at buying if they can afford to do so. When you buy a mobile home, you own it. If you rent a home, it will always belong to someone else.
Rent is expensive in cities like San Antonio. We did a real quick calculation, and if you have a 15 year chattel loan and you park it in a mobile home park, add taxes, insurance, and everything else, most people will pay less than renting (when comparing renting vs owning the same home) AND after 15 years, you own the home!
REQUIRED DISCLAIMER – we are not a bank, so this is not a promise. Just because the math might work for most people does not mean it will work for you, so you want to get approved for a loan to know for sure whether buying is indeed cheaper for you.
We should add in most states, if you get behind on rent, you can get evicted as quickly as 30 days after the rent was due. When you own a home, you have more time to work with the lender to work things out if you take a significant financial hit. It normally takes at least 2 months to repossess a mobile home as personal property and at least three months if it is considered real property (depending on the state you are in). This does not mean you should be late on rents, it is just comforting to know you have more time to recover if things go poorly on the income front.
Other Things To Consider?
Everyone is different, but here are a few other things to consider.
Do you have a baby on the way? Most people find their hands full the last month of pregnancy and the first couple of months after the baby comes.
Does life have you overwhelmed? Moving is stressful, no matter whether it is a new home, an old home, or an apartment. It is hard to make decisions when you are overwhelmed, so give yourself time, and don’t rush to buy a new home unless you have to.
Are you buying because someone told you to? STOP. You should only buy a home because YOU want to buy a home.
Other considerations? Talk to a trusted friend or relative.
You can also talk to one of our team to get our professional perspective. We only hire honest people who will shoot straight with you. It’s always free to call with no obligation to buy.