While other lenders have pulled out of the manufactured housing market, we’ve continued to offer a wide variety of financing options specifically designed for manufactured housing. Plus, our MH Advantage™ provides access to flexible underwriting standards and reduced pricing for manufactured homes meet specific construction, architectural design, and energy efficiency standards.
Don’t let mortgages spook you away
Are you still not sure about investing in a manufactured home? We’ve got plenty of resources to help:
6 Tips for Financing Your Manufactured Home
Those who own a manufactured home may be used to paying more, but they don’t have to.
Despite popular thought, owning a manufactured home doesn’t have to mean higher rates and prepayment penalties. The value and quality of these homes are improving, and so are the financing opportunities. In fact, if you own the land and the manufactured home, the rates and fees are almost identical to a conventional single-family home. Stick to these six tips when financing a manufactured home.
1. Own the land
If you purchased a manufactured home, you are probably financially aware and responsible. Chances are, you wanted to avoid getting in over your head with an expensive home. While purchasing property may be a little pricier up-front, it’s actually the less-expensive route if you factor in the cost to rent and the higher rates offered for home financing. There are land-and-home packages out there and, once you own the land and the home, it’s likely the value of your property will increase.
2. Opt for refinance
Consider this: If you took the builder’s or seller’s preferred financing, you have the option to refinance out of it. This route could help you make this investment more personalized to fit your needs.
Refinancing a manufactured home is quite common in the mortgage industry. One type of refinancing transaction is “cash-out,” in which case you can refinance and use that cash to make fancy upgrades (hello new kitchen!). But, in these situations, the rates offered can be higher than a rate-and-term refinance. Reap the benefits of the enhanced kitchen (or similar upgrade) but be informed: If you choose to take cash out, you have to wait six months after buying the home—or, you can take advantage of the rate-and-term refinance the next day and save money over the life of your loan.)
3. Make it a 15-year term
In general, the risk on a 15-year mortgage term is much lower and the rates are more attractive than other available term lengths. People who find themselves three or four years into a 30-year term with a rate of 7–9% are pleased to discover that they can refinance into a 15-year term and their monthly payment may stay around the same amount. In this situation, the borrower may continue to have a similar payment but, instead of paying for another 26 years, they only have 15 years left. Where there are alternatives, there is an opportunity.
4. See if you qualify for HARP and streamline loans
If your original loan was FHA or conventional, you could qualify for these special programs. Keep in mind that not all lenders offer these programs. Not sure if you have a HARP Eligible Loan? Find out here and here to see if your home is listed. If your home is listed, you may qualify for a HARP loan. If you currently have an FHA loan, check your monthly statement to see if it’s listed as FHA. If you’re eligible for these programs, you’ll want to take advantage of them and the extra cash they can put in your pocket.
5. Get familiar with your credit score
If possible, try to keep your total credit used below 30% of your credit limit. This relationship (expressed as a percentage) between the number of outstanding balances on all of your credit cards divided by the sum of each card’s limit is called your credit utilization ratio. Need a deeper explanation? See a great example here of how credit utilization ratios are calculated.
6. Have some money in the bank
Try to keep some money in savings and avoid transferring funds between accounts. Underwriters generally like to see that your savings is stable and doesn’t fluctuate much. A lot of transfer activity may cause an underwriter to ask for a paper trail—proof of the transfers and where the funds originated. Any chance you have to legitimize your money will work in your favor.
Manufactured homes may have a reputation for carrying higher rates and prepayment penalties, but that notion is quickly changing. As the mortgage industry progresses, more opportunities are opening for affordable manufactured home financing.
4 Reasons Why a Tiny House Is Worth Your Attention
These dinky dwellings are making a big commotion in the housing industry.
By now, you’ve probably heard of the latest housing trend—tiny homes. While the average American house is over 2,400 square feet, tiny homeowners are opting for a living space that’s a meager 100–500 square feet! This countercultural tiny house movement is picking up speed and it doesn’t seem to be slowing down. Is it crazy to voluntarily live your life in a glorified camping trailer? Let’s look at some of the practical benefits and reasons why people are joining the tiny house movement.
Live the simple life
In this present culture of more, more, more, the practice of downsizing is unusual. Rather than acquiring things, tiny homeowners seek to acquire experiences. They favor a minimalist alternative lifestyle of fewer belongings and more memories made. For tiny homeowners, the focus is on travel, time spent in the great outdoors, and nurturing the human connection. Owning a tiny house is more than just a fun and exciting challenge, it’s a lifestyle that reflects every aspect of what they believe is truly important in life.
Enjoy financial freedom
A basic principle to tiny living is the notion that owning a home shouldn’t require sacrificing your financial freedom to gain luxury. In fact, most tiny homeowners are able to save more money than traditional homeowners, thanks to the affordability offered by tiny living.
Let’s crunch some numbers. The average cost to buy a ready-made tiny house is anywhere from $30,000–$60,000. Build it yourself and that’s usually between $18,000–$40,000. Compare that to the traditional American home that sells for hundreds of thousands of dollars. And get this—68% of tiny homeowners live free of mortgage debt while only 29.3% of all American homeowners enjoy that privilege. Did we mention utility bills? Tiny houses are designed to be partially or fully independent of public utilities which means, for some tiny homeowners, no bills to pay.
Sustain yourself and the environment
Yet another benefit to this lifestyle is the small footprint tiny homes leave on the environment. Tiny homeowners who seek to be 100% self-sufficient and eco-friendly are finding clever and creative ways to live off the grid. For example, tiny houses use less waste—both in the way they are built and in their day-to-day function. Many tiny houses run on solar panels or a generator as their primary or only energy source. Self-sustaining HVAC units used by tiny homeowners include energy-efficient compact air conditioners and wood-burning stoves. Ever wondered about tiny house bathroom plumbing? Most tiny houses use composting toilets, which are completely self-contained, portable, and beneficial to maintaining clean natural waterways.
Be more flexible
While some tiny homeowners prefer to stay put, others enjoy the mobility of a tiny house on wheels. Stationary tiny homes are sometimes hooked up to public utilities, like a regular home, and can be built in all kinds of shapes and sizes. On the other hand, mobile tiny homes are built on trailers that can be attached to your vehicle and moved from place to place. One benefit to a tiny house on wheels is the opportunity to buy land in several states and move around the country whenever you want. If you’re not ready to buy land, no problem. Tiny house communities are popping up all across the nation with arms wide open to other like-minded folks.
When living tiny is simple, self-sustaining, and eco-friendly and offers financial freedom and flexibility, it’s no wonder so many people are joining the tiny house movement.
How to Finance a Tiny House
Need a little help financing a tiny house? We’ve got options.
Since the summer of 2014, the topic of tiny houses has rapidly gained popularity, especially in the U.S. From tv shows to tiny house communities, the tiny house movement is making a big commotion in the housing industry. But behind every tiny homeowner’s dreams of flexibility, living a simple life, and helping the environment comes a more serious question: how do you finance a tiny house?
Can I take out a mortgage for my tiny house?
In short, yes. While traditional lending options for tiny houses were scarce in the past, Cardinal Financial now offers Conventional financing for tiny homes, container homes, and other similar properties. Here’s the catch. The only way to get a Conventional mortgage for a tiny house is if it’s built on a foundation—it can’t be mobile.
If it’s mobile, it’s not considered real property, therefore, it doesn’t qualify for a traditional mortgage. Aside from that, if your property meets all applicable appraisal requirements and your credit score is above 620, you should be good to go. We’ll also accept down payments as low as 3%, so if you see a tiny house in your future, there’s a good chance you’ll be able to finance one with us.
While traditional lending options for tiny houses were scarce in the past, Cardinal Financial now offers Conventional financing for tiny homes, container homes, and other similar properties.
Do it yourself
Since tiny houses are significantly cheaper than traditional homes on the market, it’s safe to say you can probably come up with financing on your own. If you already have a primary residence and you’re not in a hurry to move, a good bet may be to make your current living situation work as long as possible and save up during that time. Then, when it comes time to finance your tiny house, you can pay solely from your savings. While this method takes longer than other options, the benefit is moving into your tiny house debt-free! That’s something traditional homeowners can’t tout.
Borrow from friends and family
If you’re someone who has generous friends and family who support your tiny house dreams, it might be worth it to ask them for financial support! Benefits may include: You don’t have to involve a financial institution. You get to determine the payback schedule with someone you know well and trust. You might even be able to borrow without interest. Basically, the two of you can make your own rules, so long as the agreement is fair and doesn’t leave either one of you in financial straits.
If you’re someone who has generous friends and family who support your tiny house dreams, it might be worth it to ask them for financial support!
One of the coolest things about the tiny house movement is that it really feels like a community. This vibe comes to life through peer-to-peer lending sites where prospective tiny homeowners can access funding and get connected to third-party lenders. Normally, these lenders are investors who genuinely desire to help tiny homeowners achieve their tiny living dreams and are supportive of the big-picture tiny house movement. How cool is that?!
Other types of loans
Secured Loan: Secured loans are tethered to property. This means you can borrow money from a secured source, such as equity in your primary residence, another property, or even a paid-off car. With a secured loan, you can borrow money against your assets and use that money to finance your tiny house.
Unsecured Loan: Unlike secured loans, unsecured loans are not attached to a piece of property. You can borrow an unsecured loan from your bank once they determine that you have qualifying credit.
Manufacturer Loan: This type of loan is quite common in the tiny house industry. Many tiny house manufacturing companies have their own financing set up and will offer this type of loan to their tiny house customers.
Construction Loan: If you’re a real go-getter and you want to build your own tiny house, a construction loan will help you borrow as you build. These loans typically require interest-only payments during construction with the full balance due upon the house’s completion.
Installment Loan: An installment loan is a loan in which you borrow a specific amount from a lender and agree to pay it back, plus interest, in a series of monthly payments. These can be originated from your bank and are considered a generally safe and affordable alternative for tiny home financing.
RV Loan: If you’re like the majority of tiny homeowners, you joined the literal bandwagon because you wanted a mobile lifestyle, fulfilling your desires for freedom, flexibility, and more travel. However, as aforementioned, mobile tiny homes do not qualify for traditional mortgages because they’re, well, mobile. The good news: tiny house manufacturers are now classifying their products as “trailers,” making them available for RV loans. The downside: RV loans are not for primary residences, so you’ll need somewhere else to call home in order to qualify. In addition, the interest rates on RV loans tend to be higher than those of traditional home mortgages.
So which way is best?
Truth be told, there really is no “best” way to finance your tiny house. Just like the reasons why people choose tiny living are different, their financing methods will be different too. As with any big financial decision, it might be wise to contact your financial advisor to discuss which option is best suited for your personal needs and financial situation. We hope this article helps you decide which tiny house financing option works best for you.
Does taking out a mortgage for your tiny home sound like your best option? We can help you out! Call Cardinal Financial today and let’s get started.
The Disadvantages of Renting
Becoming a homeowner can be scary. If you’re on the fence, we’ve broken down the disadvantages of renting so you can make your decision confidently. Speaking of fences, wouldn’t it be nice to have one surrounding your very own yard?
Disadvantages of Renting a House or Apartment
From upstairs neighbors who moonlight as professional cloggers to rent that rises faster than the living dead, rental life has some definite downsides. Everyone’s got their own reasons for becoming a homeowner, but we’ve rounded up five key disadvantages of renting that we’re betting you can relate to:
- Can’t build equity
- Can’t build credit score
- No tax benefits
- Lack of stability
- Lack of control
If reading that list sends chills down your spine, you’re not alone. Let’s dig deeper into each disadvantage of renting a house or apartment and dispel some mortgage phobias while we’re at it.
Can’t build equity
Monthly rent might cost less than a mortgage (then again, it might not), but what are those payments going towards? When you rent, there’s no end in sight. In fact, your rent will probably increase each time you renew your lease. And that money helps pay for your landlord’s mortgage, community repairs that will be used as an excuse to raise your rent even higher, and the upkeep of amenities you might not even use.
With mortgage payments, you’re building equity. Equity is the amount of your home you actually own, i.e., how much of your mortgage you’ve paid off. So, every payment not only gets you closer to owning your home but also builds equity. That equity can be leveraged when you refinance your loan or sell your house down the line.
Can’t build credit score
While your history of making rent payments on time is impressive, it doesn’t contribute to your credit score (unless you pay a fee to have it reported to credit bureaus).
Paying off your mortgage, on the other hand, can help you build your credit. As your credit score improves over the life of your loan, you can use that to get better terms or a different mortgage type when you refinance.
No tax benefits
Taxes can be confusing, but one simple truth about them is that owning your home makes you eligible for write-offs that renting doesn’t. You might not qualify for all of them, but some of the most common tax breaks for homeowners include:
You might consider interest rates a reason to avoid buying a home, but you can actually deduct them when you file your taxes. This write-off applies to the interest paid on the first $750,000 of your home loan. You can find the full IRS explanation of how it works here.
Depending on the type of loan you have, you might have to pay mortgage insurance* each month. If you’re paying mortgage insurance, a VA loan funding fee, or a USDA loan guarantee fee, those are all considered tax-deductible by the IRS. The catch? This tax deduction might expire, so check that it’s still available before filing.
*Mortgage insurance protects the lender against losses in case the borrower defaults on their mortgage. It’s typically required if your down payment is less than 20% of the purchase price or with certain loan types, like an FHA loan.
Points are pre-paid interest on your mortgage. When you take out your home loan, you’ll have the option to purchase these points to get a lower interest rate. One point equals one percent of your mortgage, and these points can be written off as itemized deductions when you file your taxes.
As a homeowner, you’ll pay state and local property taxes. If you file jointly with a spouse, you can deduct up to $10,000 in property taxes. If you file as an individual, you can deduct up to $5,000.
Home Office Deduction
Deductions for home office expenses only apply if you’re self-employed and operating your business from home. If you’re not self-employed but work from home, you can’t deduct those expenses from your taxes.
This deduction only applies to medically necessary home improvements (sorry, but that man cave doesn’t qualify). This includes modifications like installing ramps, widening doorways, and lowering counters for accessibility.
Lack of stability
Another disadvantage of renting a house or apartment is the lack of stability. You’re likely renewing your lease every 6-15 months, with an increase in rent each time. With a mortgage, you’ll be looking at terms from 10-30 years. If you choose a fixed-rate mortgage, you can rely on having the same monthly payments until your mortgage is paid off or you refinance for a new rate and term.
Lack of control
If you’re tired of pricy pet policies, limited decor options, and all the other community guidelines that renting entails, it might be time to buy a house. You may still have to deal with an HOA, but you’ll have a lot more freedom over decorations, landscaping, and your space in general.
When you buy a house, you also get more control over the type of community you move to, whether you’re looking for LGBTQ-friendly neighborhoods, locations with fun educational opportunities that fit your kids’ needs, or a dog-friendly environment for the furrier members of your family.
Know what to expect and see it actually happen.
- A personalize loan process that delivers success
- No robots or automated systems, just real people who you can talk to
- Trusted experts who get to know your unique needs
Here’s what our clients are saying:
Minimal headaches and a lot of clarity.
“Matt and John are both great – always available for questions, able to explain all of my options to me immediately and simply. Both my initial loan and a complicated refinance were handled through them with minimal headaches and a lot of clarity.”
“This is the third time we have worked with Matt and there’s a reason we keep coming back. He is easy and fun to work with (which is important when you’re signing your life away on a home mortgage haha!) and makes the process easy breezy. But don’t let the fun fool you, he is professional and knows his stuff. We are grateful to have him as our mortgage guru. Thanks, Matt!”
Big Suitcase Full of Money – with a SMILE!
“The Primo Loans team checked ALL the boxes on my investment purchase! Their team picks up the phone, has my best interest in mind, communicates well, willing to work for my business, and has done an amazing job on my loans over the years. Continuously improving the process all while maintaining an authentic and sincere approach to lending keeps us coming back for more. Really, call them. They are a great source of knowledge.”
Could not have asked for a smoother process!
“They were more than willing to answer any questions we had at any time. They continuously checked in to make sure things were going good on our side. They work very well together and got us the beautiful home we are in for a great price with great rates in about a month. During the signing, even the agents could not believe the numbers compared to some they had seen previously. Primo Loans has a great team to work with. Could not recommend them more!!”
A buying process as smooth as it could be.
“Matt and his team helped make my and my fiance’s house buying process as smooth as it could be! Matt took time out of his day for me to talk numbers whenever I needed him to and rework any situation that raised a concern to me so I would better understand. He continuously emailed us to make sure all was going well on our side so that closing would be complete in time, which we finished well ahead of schedule! This is my second buying experience with Primo Loans and I have no complaints about this Team.”
A Loan Process as stress-free as
- Get in your home quickly with no hassle.
- A name and direct phone number you can call.
- Walk through your long-term investment goals.
Don’t end up in a hotel with everything you own in a truck.
- Get help from real people, not a robot on the phone.
- Don’t work with rookies who are just learning the loan process.
- Stop relying on algorithms that don’t deliver success.
We won’t put you in a home you can’t afford.
At Primo Loans, we know you want to feel confident throughout your mortgage experience. To do that, you need a loan officer who will personally lead you through the process and help eliminate the hassles. The problem is, buying a home is one of the largest investments you’ll make in your life. The loan process is often overwhelming and can make you feel anxious that you won’t qualify for the home your family needs.
Contact us at your convenience by giving us your name and phone number!
We’ll lead you step-by-step through the loan process. You’ll be surprised how easy it is.
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