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Modular home mortgage
Posted on 9/28/26 at 3:02 pm
Posted on 9/28/26 at 3:02 pm
In the beginning stages of financing to purchase a modular home. Already own the land it’s going to be placed on. The banker advised us to do a balloon loan with a 6.9% rate. I’ve been looking at the pros and cons of a balloon compared to a conventional loan and am not swayed either way by what I’ve read. Anyone have any advice?
Posted on 9/28/26 at 3:08 pm to tigger4ever
Is this the type of home that loses value instead of growing?
Posted on 9/28/26 at 3:22 pm to notsince98
Basically might, but just couldn’t go for an expensive build.
Posted on 9/28/26 at 3:28 pm to tigger4ever
quote:
Modular
Who is calling it a modular home? The seller?
Does it have an axle? VIN?
If yes, it isn't modular. You are buying a mobile home/manufactured home.
It has been a while since I was in the mortgage business. But true modular homes were treated like stick built frame homes. Conventional mortgages.
Posted on 9/28/26 at 3:45 pm to tigger4ever
quote:
Basically might, but just couldn’t go for an expensive build.
Whatever you can do to payoff the debt the fastest is the choice here.
Posted on 9/28/26 at 5:28 pm to tigger4ever
So a balloon loan on a depreciating (losing value) asset? So in the end you are left with a huge final payment on a less than market value mobile home?
Posted on 9/28/26 at 5:46 pm to Jcharles
quote:
So in the end you are left with a huge final payment on a less than market value mobile home?
Every home depreciates.
Even stick built homes.
It is the land that appreciates.
It is the difficulty for financing mobile homes that depreciates the resale market differently than stick built homes (i.e. the land doesn't appreciate because it has a mobile home on it. It might be better as raw land versus a property with manufactured housing).
It sounds like he is having difficulty with financing right now (so my guess is that he is buying a mobile home).
Salespeople avoid using the term mobile home because wives and girlfriends have sensitive ears to such language. My guess is that the OP is married or has someone of the opposite persuasion helping him with the process.
Posted on 9/28/26 at 8:13 pm to meansonny
quote:
Every home depreciates.
Even stick built homes.
This is a common cope but it just isn't true.
Posted on 9/28/26 at 8:41 pm to notsince98
quote:
This is a common cope but it just isn't true.
You've never seen an appraisal in your life.
Have you ever owned a home?
Lol
What the hell do you think happens to the home 20 years in? 35 years in? 50 years in?
Posted on 9/29/26 at 10:43 am to meansonny
quote:
Every home depreciates.
Even stick built homes.
It is the land that appreciates.
Posted on 9/29/26 at 11:04 am to meansonny
Posted on 9/29/26 at 1:36 pm to geauxtigers
Land is 4 times more volatile than dwelling. It seems most certainly the case that in most suburban and urban markets that it's the land that increases in value. In BR, just drive through Southdowns to prove it to yourself. 75% of the inventory might be teardowns there, and yet prices are quite high.
Posted on 9/29/26 at 1:56 pm to Big Scrub TX
If anyone has ever looked at a home appraisal, I would love for them to argue that homes do not depreciate.
If you dont know facts, just keep commenting. That is fun too.
The home/dwelling absolutely factors into demand which factors into value/price.
4 bathrooms versus 3.
2 stories versus 1.
Basement versus slab.
That is all absolutely true.
You know what else factors into demand?
Age/Condition/Wear.
The government sponsored 30 year mortgages for the purpose of the depreciation lifespan of a house back in the early 20th century.
The inability to even use common sense when most MT are homeowners is scary.
If you dont know facts, just keep commenting. That is fun too.
The home/dwelling absolutely factors into demand which factors into value/price.
4 bathrooms versus 3.
2 stories versus 1.
Basement versus slab.
That is all absolutely true.
You know what else factors into demand?
Age/Condition/Wear.
The government sponsored 30 year mortgages for the purpose of the depreciation lifespan of a house back in the early 20th century.
The inability to even use common sense when most MT are homeowners is scary.
Posted on 9/30/26 at 9:59 am to meansonny
Depreciation is not the same as a concession or reduction for various items.
I don't think anyone would argue that Age/Condition/Wear doesn't matter.
It is routine for appraisers to knock off $ from the appraised price for items like wear and tear, condition, poor maintenance and % of life left on items like roof and HVAC.
But to say houses don't appreciate, they depreciate, that is a strange position to take.
I don't think anyone would argue that Age/Condition/Wear doesn't matter.
It is routine for appraisers to knock off $ from the appraised price for items like wear and tear, condition, poor maintenance and % of life left on items like roof and HVAC.
But to say houses don't appreciate, they depreciate, that is a strange position to take.
Posted on 9/30/26 at 10:22 am to Helo
quote:
Depreciation is not the same as a concession or reduction for various items.
I dont know what that means.
Edit to add: depreciation is one type of concession or reduction.
I dont know what point you are trying to make.
quote:
It is routine for appraisers to knock off $ from the appraised price for items like wear and tear, condition, poor maintenance and % of life left on items like roof and HVAC.
By routine, you mean every appraisal which typically accounts for both a market value (with adjustments for depreciation) and cost approach (with adjustments for depreciation).
The only valuation that doesnt take a direct adjustment for depreciation is the income approach. Because the renters already account for that in their leasing habits.
quote:
But to say houses don't appreciate,
I think I see why so many struggle with the concept.
Saying "houses appreciate" is lazy.
You buy a house. The sales price goes up in the future. And the common rhetoric is always "houses appreciate".
Unfortunately, that isn't the truth. It isnt the mechanics of valuation.
Two identical homes right next to each other in the same subdivision. One is built 2026. One is built 2001.
The market price will value the new one substantially better. Especially if the 2001 has the original roof, hvac, water heater, cabinetry/counters, etc.. Even if you see a similar sales price, the contract itself will often show larger concessions (seller paid closing costs, carpet allowances, etc).
The sales price on the 2001 has gone up. Did it go up because it has a 25 year old roof?
Did it go up because of its proximity to a 2026 new construction of like, kind, and quality?
What is another way to describe the value of a location because of its proximity to another asset? Maybe... we are valuing that particular parcel of land?
This post was edited on 9/30/26 at 10:24 am
Posted on 9/30/26 at 10:33 am to Helo
quote:
But to say houses don't appreciate, they depreciate, that is a strange position to take.
I gave you the example of land appreciation (2 houses side by side with one built 2026 and the other built 2001).
Here is the example of land depreciation.
Home built 2006. 2008 market collapses. 2008 and 2009 foreclosure market hits.
The sales price of the 2006 home has dropped 45% in 2010.
Are you telling me that the value of the land depreciated but the value of the house on the land appreciated?
Or is it that the proximate location of the 2006 new construction to a plethora of 2008-2010 foreclosures is driving the market value of the home?
Did the value of the house drop greater than the 3 year depreciation of the home systems (roof, plumbing, electrical)?
Or maybe the reduction in value is based on the proximate location of the house to the surrounding economic environment?
Posted on 9/30/26 at 11:12 am to meansonny
quote:
Saying "houses appreciate" is lazy.
If this was directed at me, this isn't what I stated.
Anyone who owns a house of some sort knows that houses do not always appreciate. Your example post 2008 is a good point of housing collapses as is the past 2-3 years housing prices have been flat or declining.
The variables that affect home prices is super complex and can include among things you mentioned, Age and condition of home. Proximity to newer homes, desirability of that location / home but those are but pieces to the pricing puzzle and probably need their own thread.
I am simply pointed out your statement that houses don't appreciate / land does to be, let's say, not the general consensus. That isn't to say land doesn't or can't appreciate because it certainly can but generally, houses will appreciate over time given the right conditions if you didn't buy in a bubble.
Would a condo appreciate?
What about a townhome?
If it is the land that holds the primary value, why are mortgages on houses considerably easier to get than on vacant / unimproved land?
Posted on 9/30/26 at 11:18 am to meansonny
quote:
Who is calling it a modular home? The seller?
This is the most important question that has gone unanswered. More specifically, is it a steel frame build? Because that’s what can make a real difference trying to obtain a conventional loan.
Posted on 9/30/26 at 11:25 am to Helo
OP: I’m having a hard time getting a mortgage on a mobile home
RESPONSE: a history of land and property appreciation economics
RESPONSE: a history of land and property appreciation economics
This post was edited on 9/30/26 at 11:26 am
Posted on 9/30/26 at 3:39 pm to Helo
quote:
Would a condo appreciate?
Great concept.
Same unit layout and buildout.
1st floor versus top floor.
It isn't the unit that is appreciating after purchase. It is the first three rules of real estate. The unit itself experiences depreciation according to every appraisal ever completed.
Everything about the structure depreciates. If you never replace the roof, you will have damage. If you never replace the water heater, you will have damage. If you never replace the electrical, you will have damage. If you never replace the countertops and cabinets, you will have obsolescence.
The future values of homes are mainly determined by proximity to other desirable or undesirable assets. Up or down.
quote:
If it is the land that holds the primary value, why are mortgages on houses considerably easier to get than on vacant / unimproved land?
The government backs financing for homes (FNMA, FHLMC, FHA, VA). They don't back financing for mobile homes. They don't back financing for land.
The government guarantee on financing creates a homogenous marketplace for competitive mortgages.
The government is trying to use economic forces to encourage home ownership. They don't have the same feeling about land speculation.
Ive got nothing else to add.
Linguistics and rhetoric are messing with a lot of people's minds ("your home appreciated"). You've been saying it wrong all of your lives.
To the OP, question the sales representative if there is an axle or VIN number. If there is, he is lying to you with his own semantics.
Look into true modular homes. Elon's company is Boxable. Or something like that. Once built on location, the mortgage and real estate industry should treat them like stick built homes.
If your price point is still a mobile home, I think the new ones are good quality. But know the issues ahead of time about selling them. It may be easier to turn it into a rental property than to sell it to someone else who needs to apply for a mortgage.
Edit to add: balloons on mobile homes are not good. The entire concept is that getting financing for a mobile home is difficult. You are forcing yourself to do it again whether the timing is favorable or not.
Only do the balloon if you think you can just about pay the entire thing off during the active term.
This post was edited on 9/30/26 at 3:49 pm
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