Are you in the market for a new manufactured home? Finding a loan calculator designed specifically for those homes can be an important step. You must take the time to prepare and plan ahead so that you know what you can afford, as well as what you can expect to spend on buying a manufactured home.
According to research by the Manufactured Housing Institute, the median sales price of new manufactured homes in 2018 was around $70,600, which is about $230,000 less than the average new home sale at the same time. Today, that’s only continued as a trend, with manufactured homes offering the same high-quality construction and features of traditional homes at a fraction of the cost.
Still, having a manufactured home loan calculator will help you ensure that you can afford your new home. It will also help you understand all the costs that are factored into a manufactured home loans, and how the financing process works. You can choose different interest rates, or even calculate things based on what you think you can afford in terms of a monthly payment, rather than putting in a sale price and seeing how much it would cost.
What Is a Manufactured Home Loan Calculator?
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These calculators are designed specifically to help you calculate the various terms and costs involved in buying a manufactured home with the help of a loan. You can expect to see fields in the calculator like:
- Loan Amount
- Interest Rate
- Payment Terms
- Loan Term (Total)
- Down Payment
- Monthly Payment Amount
You will be able to play with all of these variables to see how interest rate changes can affect your loan over a lifetime, or even to figure out how to manage to budget a payment into your monthly expenses if you don’t know what you can afford. This is a great starting point, even before you apply for financing, to ensure that you’re financially prepared and capable of purchasing a manufactured home with a loan.
How Are Amounts Determined?
The loan amount is fairly obvious– that’s how much money you’ll need to borrow to purchase the home. The interest rate may vary, depending on the economy at the time of the purchase as well as your financial situation. If you have a really good credit score, you’ll get lower interest rates than someone with a higher score. The payment terms, again, will depend on your exact arrangement.
Most lenders do monthly payments, but you may have bi-monthly, bi-weekly, or semi-monthly payments. There are different options for various needs, so be sure to explore them all. The total loan term will usually be between 20 and 30 years, although some people take out 15-year loans since manufactured homes are so much cheaper. You can even try to put in the numbers to calculate how quickly you could pay off a loan using this feature.
You’ll generally need a down payment when you are getting a manufactured home loan. This amount will go into the calculator to help determine the final monthly payment. Again, you can calculate how much of a down payment you will need, or you can input a down payment to help you calculate other factors. Then, you have the monthly payment amount. Usually, most people are trying to figure out this amount when they use a calculator.
However, if you know that you can only afford $600 a month, for example, you can use the calculator to figure out how much you can afford to borrow in total, or which interest rate or down payment situation might be best for you. It’s a handy way to make sure that your loan is perfect for your needs before you get in over your head.
Is This Different Than a Mortgage Calculator?
While you could use a standard mortgage calculator to determine the cost of a manufactured home loan, the terms and parameters may not be the same so you might not get an accurate estimate. You also may not be able to consider all of the same elements or use unique payment terms or factors that don’t exist for standard mortgages. That’s why it’s better to find a calculator that’s specific to your needs.
Manufactured home loan calculators are specifically created for this purpose. They can give you all of the information that you need to make an informed decision about your new home loan and how to go about it. It’s also important because even within the manufactured home niche, there are different categories for manufactured homes, mobile homes, and modular homes.
For starters, most lenders won’t offer mortgage or home loans on older mobile homes. Newer models can be financed with personal loans and Chattel loans. Manufactured and modular homes have many more options, including FHA Title I loans, retail installment contracts, VA loans, and Fannie Mae and Freddie Mac mortgage programs.
How Much Can I Afford?
Using a manufactured home loan calculator, you will be able to figure out what you can afford to spend on your new home. If you have a monthly payment in mind, enter that and then put in an interest rate and loan length, and the total amount that you can afford to borrow will populate. If you’re not sure of the interest rates, look up what the average rates are right now and go with the high side of the range to be safe.
If you want to see if you can afford a certain home based on its sales price, enter the cost, and again as many of the terms as you know, and calculate the total monthly payment. This is a great way to make sure you’re on the right track before you contact the lender or invest the time in applying. With a proper calculator, you can learn a lot about financing your new manufactured home and get a better loan as a result.
Kevin is a contributing author to several financial publications online. He has worked in the industry as a writer for several years now, and often works with financial planners to create world-class content.