For the first-time manufactured home buyer, there may be certain details you need to be familiar with when it comes to the mortgage. When he first considers a home loan contract, there are interest rates, originator fees, mortgage insurance and closing costs to consider. There is much more to the final cost of a mortgage than just the amount needed to purchase the home.
The first thing any new home buyer should consider is interest rates. Aside from the price of the new house, nothing will affect that monthly payment more than the interest rate. Throughout the mortgage process, rates are in constant flux, going up one day and down the next, which means the terms of your prospective loan are in a state of constant flux until the rate is locked.
Not only do you need to keep an eye on those interest rates, but you also need to decide what type of loan will work best for you. The two main types of manufactured home mortgages are fixed-rate or variable-rate loans. The best option for most people is a fixed-rate mortgage because there are no unwanted surprises down the road with one. This is because the interest rate will not change over the life of the loan, keeping the monthly payment constant until it is paid off.
Variable-rate loans, also known as adjustable-rate mortgages (ARMs), can be more dangerous for people on a tight budget. These types of loans typically start out with a lower-than-average interest rate, which may sound good, but when it comes time to adjust the new interest rate, most of the time it goes up because it’s based on current loan rates. market. This can result in a staggering increase in monthly payments to the tune of hundreds of extra dollars per month. Something most budgets just can’t handle.
Another thing to keep in mind about manufactured home mortgage rates is that they can be decidedly different between different lenders. This is why it is vitally important for prospective homebuyers to obtain multiple quotes from a variety of lenders. Don’t leave tens of thousands of dollars on the table by getting a single quote; Simply missing half a percentage point on a quote you didn’t receive could cost you money in the long run.
There are a few different places where you can get a quote; your local bank or credit union, a mortgage broker, and on the Internet. Each of these has their strengths and weaknesses, but it’s worth shopping around. Careful reading of each quote will allow you to make an informed decision and choose the best manufactured home mortgage for your financial situation.
