Things To Understand About Manufactured Home Reverse Mortgages
Manufactured homes have more than just a few benefits to reap from, include affordability in terms of the cost of purchase, convenience, flexibility, and such. Today, manufactured homeowners are also eligible for home loans or mortgages, including reverse mortgages. This article seeks to explain what a reverse mortgage is, along with a few more tips on how to get Manufactured Home Reverse Mortgages.
In simple language, a reverse mortgage is just a type of loan you can take against your home equity to get cash advancement for purposes such as home improvement, clearing off a mortgage, studies, or other purposes. It is almost similar to a home equity loan, only that the borrower will not be required to make monthly payments of interest and principal to clear the loan in the case of a Reverse Mortgage. Payment is only required in cases such as the borrowers’ death or relocation/moving. The loan may also become due in the case that the borrower fails to meet their obligations, like paying property tax and/or homeowners insurance.
Reverse Mortgage Payments
When applying for the reverse home loan, the manufactured home borrower has various options to choose from in terms of how they want the payments given to them. You can decide to receive the payment in a lump sum or in installments, among several other payment options depending on your lender. As long as you occupy the home as your principal residence, no monthly payments will be required from you. However, the house may be sold off to pay back part of the mortgage or the whole of it depending on the situation at hand. In other cases, insurance may pay the loan in case the borrower is unable to meet their obligations or dies. Manufacturers home heirs may also decide to pay back the loan in cash or savings. However, most manufactured home reverse loans are non-recourse, meaning that you don’t have to pay back the loan balance if it ever goes above the property value.
Eligibility Criteria/ Requirements
When looking for reverse mortgage financing for your manufactured home, it is important to understand some of the eligibility requirements from both you and your home. For instance, most lenders will follow the HUD or FHA eligibility criteria. Some of the important factors that can determine your eligibility include size, location, foundation, your home’s year of construction or manufacturing date, HUD labeling, and much more. For, instance, your manufactured home’s floor area should be at least 400 square feet. As a matter of fact, most lenders offer reverse loans for double wide manufactured homes and bigger. The home should also be on a permanent foundation, be located in a non-flood zone and should remain on the original site throughout the period/term of the loan. The property should also have clear labels of details such as model, make, serial number and logo. In most cases, manufactured homes made not before 1976 are more eligible. You must also be the legal owner of the manufactured home and; depending on your home's location or state, there might be some age restrictions involved. For instance, government-insured reverse mortgage loans are issued to individuals who are about to retire, say age 62 or older. However, some lender may allow you to refinance or access a new loan if you are the rightful heir of the property. In some cases, requirements for eligibility may differ from lender to lender.
The cost factor is actually one of the most important considerations to make before approaching a taking a reverse mortgage. This includes the interest or loan appreciation rate plus other costs such as the upfront costs incurred when obtaining the loan. In some cases, upfront costs can be higher for manufactured homes in comparison to the case of regular site-built homes. This is mostly the case due to things such as foundation inspection, which is usually a requirement and is performed by a professional, licensed engineer. Sometimes there is also an appraisal fee involved. In most cases, the loan interest rates will also differ from lender to lender, making it a wise idea to do your homework first and establish a lender with the lender with the best deal.
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