Financing and Insurance for manufactured and modular homes

If you are thinking about making financing arrangements through a manufactured home dealer, it would be a good idea to also learn about other loan sources. Banks, credit unions and savings and loan associations may have loan programs that you could use. Sometimes, the Federal Housing Administration, or the Veterans Administration, will guarantee a loan for the home, as well as the land and its preparation.

A federal loan guarantee does NOT mean you are guaranteed a loan. It is a guarantee to the lender that they will get their money back if the loan isn't paid. It WILL probably get you a lower interest rate and a longer time to pay back the loan but it may also be more restrictive and require more effort on the part of the retailer to meet certain standards. There will also be more paperwork involved.

The federal Truth-in-Lending Law requires that lenders disclose the annual percentage rate being applied on loans. The lender must tell you the annual percentage rate you are being charged in simple interest terms.

Be sure to check into all financing options available to you. Make sure you understand the finance costs. Do NOT sign ANYTHING until you are sure you understand it. Be sure to get EVERYTHING IN WRITING. Save a complete set of all finished paperwork for yourself.

Many banks, federal agencies and state agencies have first time and low income buyers programs. If you are interested in this type of program, call your local banks, lenders and state agencies for information on any programs they may have available. Many manufactured home dealers should know about the same programs. Ask your manufactured home dealer if he/she has any knowledge of any type of program that will help you lower your costs or interest rates.

Even if you do not qualify for a first time buyers program, or some other similar program, manufactured home dealers and their own lenders will run specials to tempt you to buy a home in an off-season or otherwise slow sales period. This might be a good time to find a low interest rate - not to mention a good price on the home.

Anyone interested in purchasing a manufactured home should try to give themselves plenty of time to learn as much as possible before buying a home and not be rushed by circumstances NOR by a dealer. Always check around to get all the information available to you. Find a manufactured home dealer you are comfortable with and feel confidence in. No matter how confident you are, though, remember to
GET EVERYTHING IN WRITING!

Ordinarily, there will be no closing costs or attorney's fees to pay in financing and insuring a home. However, if you are purchasing your own property on which to place your home, there may be closing costs. Title searches are not required but it is a good idea to have a title search performed, to be certain the ownership of the land is clearly defined and there are no prior liens, or claims on it. Title insurance offers additional protection against unexpected claims.

Insurance is required by lending institutions and, usually, is included in the total home package that you are going to have financed. This will usually only be enough coverage to protect the lender's interest in your home and may not be all you will want or need. In addition to fire, theft and physical damage insurance on the home, you have to remember that you have more than your home to worry about. The personal belongings in the home will not be covered unless you arrange for it.

Liability coverage might also be considered - especially if you have a business in your home. Also, if you live in a flood, earthquake, tornado or hurricane prone area, you might want to make sure you are covered in the event one of these happens. If you are in an area prone to alien invasions you might want to think about relocating. (Just kidding).

Even if you pay cash for your manufactured home, you still need coverage to protect your own interests. Credit life insurance will pay any remaining balance on the home in the event of your death. Your survivors will not have to worry about paying it off.

Be sure to shop around for insurance. Rates can vary greatly and so can the coverage and deductibles.

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