Buying a Mobile Home: Smart Decision or Big Mistake?

In today’s market, buying a mobile home can be tempting – especially as home prices continue their upward climb.

Not only do mobile homes come at a significantly lower cost than traditional single-family properties or condos, but they’re also flexible in location. And if you’re not quite sure where you want to put down roots, or you think you may move a few years down the road, this can be an appealing feature.

Still, mobile homes aren’t without their faults – especially in the long-term.

Are you considering buying a mobile home instead of a townhome, condo or single-family home? Want to make sure it’s the best decision for your household before pulling the trigger? Let’s look at the pros and cons of mobile homes when compared to other purchase options.

Mobile Homes v. Single-family Homes, Condos & Townhomes

The biggest difference between buying a mobile home and buying a single-family house, condo or townhome is that you don’t own the land.

When you purchase a traditional home, you’re buying the land it sits on, too. With mobile homes, you’re only buying the structure. You’ll need to pay rent in a mobile home park, lease the land elsewhere or purchase a plot of land outright in order to move into the property. These costs can add up in the long run – possibly even negating the savings you enjoyed from purchasing a mobile home in the first place.

A few other considerations:

• Mobile homes depreciate in value – Mobile homes are much like cars, depreciating in value as soon as they leave the manufacturing facility. That means, more than likely, you’ll lose money when it’s time to sell. Traditional properties – ones that come with the land they sit on – almost always appreciate in value over time.
• Mobile homes are more expensive to finance – If you’ll need to finance your mobile home purchase, you might want to think again. Because mobile homes are considered “personal” property rather than “real” property, they’re not eligible for mortgage loans. Personal property loans typically come with higher interest rates and shorter terms than mortgages, and they often require bigger down payments, too.
• Mobile homes are more prone to damage – Because mobile homes don’t have a permanent foundation, they’re more vulnerable in harsh weather, natural disasters and other challenging circumstances. This can make insurance more expensive and put your belongings and loved ones in danger.

Still, despite these disadvantages, there are some cases when buying a mobile home may be the best choice. If you only have a limited budget but need lots of space, mobile homes can often offer you more for your money, simply because of the lower-cost materials used (and the lack of land involved.) Mobile homes are also only semi-permanent, so if you think you might want to move down the line, they offer more flexibility in that regard. For a few thousand dollars, you can move the home to any location you see fit.

Keep in mind, though, if buying a mobile home is on your radar because of its lower costs, there are ways to make a traditional home purchase more affordable, too. Mortgage rates are still at historical lows, and there are also dozens of low-down payment loan options you may be eligible for. Closing cost and down payment assistance programs can also help lower your expenses as well. Contact SnapFi today to learn more about making your home purchase more affordable.