How To Buy Land For A Mobile Home

‍Homeownership with a little bit of property is a dream for many in America today, but only some know how to purchase. How do you buy land for a mobile home?

Before securing a lender to finance any acreage, one should undertake careful research. Assessing utility access, water sources, roadway easements, and even local zoning ordinances can make purchasing land much more manageable.  Once done, a lender can be secured for the financing of the property.

The dream of a home of their own with a little bit of acreage can be a compelling vision for many new families. Fresh country air fills your lungs. There is room to grow and stretch your legs. The quiet nature sounds replace the constant wail of city traffic. A life in the country with a mobile or modular home can almost seem pretty close to heaven. Yet, as wonderful as these dreams are, buying the right property can also be a massive headache if not done correctly. If buyers rush into purchasing land unsuitable for their homestead, it can be an expensive and challenging lesson to learn and even more to correct.

‍‍‍What are the Steps to Buying Land for a Mobile Home?

There are several stages to minimizing the headaches involved in buying a piece of property for your mobile home.

Ask the Right Questions

Once you have an idea of where you want to put your mobile home, a lot of information needs to be discovered before you even begin to think about approaching a lender for money.

Is the Property Zoned for a Mobile Home?

Many local municipalities restrict where a modular/mobile home can be constructed. Some cities only allow mobile homes to be situated in mobile home parks, while other homes will allow a modular home but not an older mobile home. It would be best if you were sure of your area's exact zoning codes. Most cities have zoning offices or local planning boards that oversee this kind of thing. A great place to start is a trip to your local city hall. Since these things are matters of public record, someone in the zoning office should be able to help direct you.

Is the Property Equipped with Utilities and Road Easements?

The last thing you want to do is build your mobile home on a property with no nearby utility connections. Think electricity, gas, water, and sewer lines. Here are some examples of the questions which any potential landowner must answer.

• Do you plan to install a septic tank or use existing city/county connections?
• Is there a reliable, drinkable water source? 
• How far and how much will it cost to run electrical connectivity or install needed upgrades?
• How do I plan on heating the home (gas, propane, or electricity), and what will that cost?

‍The cost of supplying these connections can drive the expense of the land through the roof. (Sometimes, the price to install connections can be more than the mobile home was worth).

Another consideration is road access. If a transport company is going to deliver the mobile home, you want to ensure an effective way into your property. Planting a mobile home in the middle of a pasture might seem idyllic, but if there is no way to drive into that pasture, it will cost you a ton of gravel and bulldozing, which is just another added expense.

Is the Property in a Flood Plain?

This is important for many reasons, only some of which are personal safety. Many land developers sell cheap acreage because they know the property sits in a flood plain and is next to impossible to insure. Be careful of the deal you find - there is a reason the price is so low. (Either it is sitting on an environmental super-fund, or it is prone to flooding every so often).

Many homes near rivers and creeks are in harm's way, and there are limits to what can be built on them.

All mobile homes require a concrete pad or prepared area before being installed. Research should be done to ensure adequate drainage from the home and that trees are situated away from the house. As tempting as it is to place your new little cottage at the bottom of a picturesque mountain, it won’t be so lovely if water pours in every time it rains.

If the land is unsuitable for a mobile home, don’t force the issue, no matter how pretty the view might be.

Is Maintenance of the Property an Issue?

There are many hidden costs to buying a piece of land that occurs after the purchase has been finalized. Land requires maintenance. For example, additional acreage will require mowing the grass, which means the purchase of a tractor or riding mower. The land might need to be fenced to keep the neighbor’s cattle from getting in. Many things can add expenses to the daily budget that landowners might not be prepared to handle.

Generally, you can only place a modular or mobile home on a quarter of an acre or more. So, you should factor in the fact that you will have to maintain a yard much larger than the one you may be used to, which means time, money, and expense.

In addition, many homeowners purchase land without thinking about the additional commute times or gasoline expenses they will incur just running errands. (Believe me, the little stuff adds up and can take a toll on the wallet)

Is the Land Affordable for the Monthly Budget?

Sometimes, you have to pay to play. In other words, buying a nice piece of property and setting up a mobile home on it can be more than the monthly budget is comfortable with. The last thing you want to do is put yourself in a financial bind every month, wondering how to pay the mortgage. Find a property that meets your needs but stays locked into the budget parameters you are comfortable with affording.

Is the Land a Good Value?

There are reasons for land prices that don't have anything to do with size and shape. Before purchasing property, you should investigate the history. Is a crop growing on the land, or are 20 cars rusting away in the back pasture? Be sure to walk the entire property so that there will not be surprises after you have moved in.

The demand for property in a particular zip code can cause a spike in property prices. Are there plans to develop homes (subdivisions) near your land? What is the land's geology (sand, clay, rock, or lead from mining in the 20s)?

Find out what price the neighbors paid for the land if you can. This information can help you establish whether the price of the land is fair or inflated because someone knows something you don’t.

Find the Right Lender

Once a suitable parcel of land has been found, it is time to find a lender. This part is as much a matter of personal preference as it is economics. Many people choose to do business with a banker known to the family for generations, which can be a huge advantage. Community banks and local credit unions often know the area and can more precisely calculate the proper value of the land and the growth potential.

That said, a local banker may only sometimes provide the best rates. Regardless of the relationship with your lending institution, you should always shop lenders and compare rates. Is the lender someone I can trust? Is the lender interested in helping me secure the property or just going through the motions? Is the rate higher than it needs to be because the lender is “marking” up the rate to make some profit?

Even local lenders will often discount an initial offering when they are challenged to compete with another lender. In a home mortgage, even a half of a percent difference can save a lot of money over the life of a loan.

A lender may run your credit and tell you what amount of land you can purchase. It is generally a good idea to combine the land and the mobile home into one mortgage, along with any additional expenses you have calculated (utilities and the like). The information a lender gives you may force you to rethink where you want to live.

Bare in mind that land loans are a more risky investment for financial institutions, and due to this fact, a lender may charge a higher interest rate than for a regular FHA or VA loan. The rate may also be tied to creditworthiness or even the amount of your downpayment.

Check if you qualify for any government program to help purchase the land. The USDA and the SBA have loans that may help defray part of the cost. Some land loans are based on balloon payments, and the buyer should have a plan for paying off the loan balance when the initial period is over.