What are the pro’s and con’s of buying a mobile home. . .
Here is a question that was recently asked on Trulia.com and my answer. . .
Buying a mobile home is very much like buying a car, in that the mobile home, generally speaking, does not improve in value. If you don’t have cash and need to get a loan, lenders see mobile homes exactly as the see cars. In many cases, traditional mortgage lenders do not do loans on mobile homes.
In addition to the investment/value issue, you typically have a lot rent that is somewhere between $300 – $500 per month. At current rates (5.5%) $300 a month is worth about $60,000 in purchase price. So if you buy a mobile home for $60,000, you could technically purchase a traditional home for around $120k for the same monthly payment, AND build equity and credit.
Some advantages include:
- Lower cost than owning a home.
- You can move the house itself
- Shorter time frame for a new mobile home than a new traditional home
Disadvantages:
- Value does not appreciate (not including land)
- Interest rates are generally higher than a traditional home
- You usually have to pay lot rent, unless you own the property
- Not as sturdy as traditional homes
- Not as energy efficient as traditional homes
In the end, mobile homes are a great way to save some money, but usually, when something is cheaper, it’s usually for a reason.
