Mobile Home Loan Refinancing is Different - Article

Manufactured Homes vs. Conventional Housing

Despite the recession, amidst an ailing real estate market and new limitations in obtaining home financing, the dream of home ownership is still alive and well. The manufactured and mobile home industry continues to take great leaps forward in these troubling times. Rich with the most state-of-the-art accommodations, today´s manufactured and mobile homes are being built with a quality never before seen in the industry, with the price advantages and affordability that all home buyers can count on.

Experts in the manufactured housing industry experienced the impact of negligent mortgage lending and the current housing crisis long before the current recession begun. The manufactured and mobile home industry topped out in 1998, when one manufactured home was being sold for every three single-family homes being sold. Even before the latest recession had begun, that figure had declined to one factory built home for every ten stick-built homes sold.

A large portion of the share for manufactured and mobile home market was lost beginning in 2001, when the financing for stick-built homes became over-available. With a surplus of "easy money", many first-time buyers (who would have been perfectly positioned to purchase a brand new manufactured home within their true budget) were presented with the opportunity to have something that was too good to be true. Many buyers went ahead and purchased these site-built homes for twice the financial liability than they truly should have.

If those same buyers had purchased a manufactured home, they would have been able to begin to accumulate steady equity in their homes while also making affordable payments, and reducing the principal balance on their Mobile Home loan. Instead, 3 million homeowners went into foreclosure in 2008 alone, resulting in 850,000 home repossessions by the lending institutions that financed these higher risk purchases.

The mobile home industry is indeed struggling, however the mood at last month's annual Manufactured Home Industry convention was optimistic. Salespeople, dealers and manufacturers are now beginning to see a new kind of customer. These new buyers are interested in economizing and recognizing that today's factory-built homes actually have the same features as their traditional stick-built counterparts.

Recent trends showing this shift show that many sensible families are now selling their traditional single-family homes and using their profit to purchase factory built homes. This segment of the buyers market is growing. More buyers are downsizing to affordable homes out of realistic necessity, and planning for retirement. In a time where social security payments and IRA funds are disappearing, the retiree segment is facing a lifestyle with a limited budget. Many seniors are even accessing their home's equity through refinancing their mobile and manufactured homes.

Manufactured home industry experts are feeling that the recession might not have hit so deep if more buyers had purchased heir mobile homes, instead of investing in costly single family homes and condominiums. Banks created many programs that made it all too easy for first-time buyers to purchase these real property single-family homes, often at twice the price of similar manufactured or mobile homes. This over buying trend also led to the sharp price hikes seen in many real estate markets across the nation.