The real estate market has undergone massive spikes in many parts of the nation over the past few years. Dallas, Texas, is no exception, as the median home price increased by 18% between November 2020 and November 2021. Understanding the options available to buyers can be helpful, especially for first-time buyers who may not know what to consider. One option that could be appealing to buyers is a manufactured home.
Considering Other Home Types
Low inventory of homes for sale in the Dallas area has led to bidding wars on properties for sale and an increase in the number of people who want to invest in real estate. However, in a seller's market, it can be difficult to find a home and make an offer that the seller accepts, especially when you're competing with multiple buyers. One option is to consider a manufactured home, which is constructed from prefabricated materials and components. Another term for a manufactured home is a factory-built home.
Some people mix up manufactured homes and mobile homes, but the two home types have some key differences. A mobile home's design resembles a modern-day camper and is typically set up on concrete or wooden blocks or metal stands. Mobile homes include the equipment needed for them to be towed to different locations, as they can move from one place to another. They were often mass-produced with few quality or safety standards imposed on the production process.
Manufactured homes differ dramatically from mobile homes in that they much more closely resemble traditional homes. They're often available in a range of styles and floor plans and can include high-end amenities such as modern and fully-equipped kitchens, spacious bedrooms, walk-in closets, and bathrooms with spa-like features. A manufactured home is designed to be transported once to its permanent location. When you purchase this type of home, the manufacturers will assemble the construction materials in one location and transport them to the property where you'll live. They assemble any components on-site, leaving you with your new home.
Manufactured home buyers can lease or purchase the land on which the home will be placed, depending on where they live. In Dallas and the surrounding area, new manufactured home communities continue to pop up, giving buyers more options. Some of these communities offer amenities to residents, such as shared outdoor spaces, swimming pools, and other services. If you choose to lease or purchase property and have your manufactured home set up on it, it's a good idea to check the local requirements for building, electrical, and waste permits.
Benefits of Manufactured Homes
One of the key benefits of purchasing a manufactured home is that you don't have to compete with other buyers. You work directly with the manufacturer to choose the floor plan and options you want. The company will arrange for the transportation and installation of the home at the designated location.
Since manufactured homes are assembled in factories, they're not affected by weather changes. Reputable companies have streamlined their manufacturing processes, which means they have faster completion times and established budgets. They're also more affordable than traditional single- or multi-family homes.
Financing a Manufactured Home
There are various mortgage options available to buyers in the Dallas area, and the array of choices can be confusing. If you're considering purchasing a manufactured home, you may qualify for a chattel mortgage. This type of mortgage is available to buyers of manufactured homes that are not permanently affixed to the land on which they are placed.
How Does a Chattel Mortgage Work?
Upon receiving approval for a chattel mortgage, the lender will issue payment to the manufactured home company that is producing your structure. The lender can apply a lien on the manufactured home as collateral on the loan. As long as you make your monthly payment on time, you can live comfortably in your manufactured home.
In addition to offering financing for manufactured homes, chattel mortgages can also provide the funds needed to purchase heavy machinery and modular homes. They qualify for this loan type because the borrower doesn't own the land on which the machinery or modular home is on.
Advantages of a Chattel Mortgage
Choosing a chattel mortgage comes with a long list of benefits. One of the key advantages is a shorter loan term than what is available with a conventional mortgage loan. The typical mortgage loan term is 30 years. Although some lenders offer 15- and 20-year options, these often come with higher interest rates and monthly payments. By contrast, the typical chattel loan term is 15 years, which allows the borrower to pay less interest over the life of the loan.
Not all lenders offer chattel mortgages to clients, and some who do offer this loan type don't have the knowledge or experience needed to handle it properly. At Cascade Loans, we specialize in chattel loans. Attainable home ownership is our passion, and we focus our efforts solely on the needs of those purchasing manufactured homes. With over two decades of experience, we're one of the most trusted lenders in the manufactured home space.
We offer competitive rates, loan programs tailored specifically to manufactured home buyers, and professional service throughout every interaction. If you have questions about the buying process of manufactured homes or would like to speak with one of our lending experts, don't hesitate to reach out. We're committed to providing personalized service to every client who may be considering a manufactured home.