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Peter Skillern executive director of the Community Reinvestment Association of North Carolina notes, [Lending] companies used to underwrite anyone who could make an X on the line [It] came back to bite them. Green Tree Financial, one of the nations largest lenders for manufactured home mortgages found that 30 year mortgages were a huge liability, mostly outlasting the homes and encouraging defaults on the loans. There were so many defaults in fact, that Green Tree filed for bankruptcy in 2002. Many lenders now will not even consider this kind of loan and potential borrowers are having difficulty financing manufactured homes. It may take more work and effort to get a manufactured home loan these days, but be sure to take your time to find the right manufactured home lender. Wes Johnson author of The Manufactured Home Buyers Handbook states that buyers, should be extremely wary of predatory lending practices. Compared with a traditional mortgage, consumers should expect to pay larger down payments, higher interest rates and generally a shorter repayment period. This doesnt mean that the loan should have ridiculous interest and payments, however. Potential borrowers should shop around and also keep in mind that it can more difficult to refinance a manufactured home mortgage than a traditional one. Manufactured homes without land are not likely build equity quickly, which makes refinancing unlikely. This also means that borrowers will have an easier time getting the first mortgage if land is part of the purchase price of the manufactured home. The value is more likely to appreciate on a manufactured home that is bundled with land. So if you think that a manufactured house might be the home of your dreams, do your research so that you can make the best decisions about financing. |
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