Today's Mortgage Rates

Manufactured homes (also known as prefabricated housing) are residences that are built entirely at a factory and then transported to the site where they will be inhabited. Though these homes are almost completely stationary, they are still sometimes referred to as “mobile homes.” Because of this and other negative stereotypes, it is often impossible to obtain a mainstream mortgage to finance a purchase of a manufactured or prefab house. Lenders have a variety of reasons why they choose to not finance these residences, but there is also some good news for owners of manufactured homes as new legislations has been passed and more opportunities are opening up.

Lenders sometimes accept the same untrue stereotypes as the general public, which can lead to problems for those looking to purchase manufacturing housing. For one, these types of residences are often portrayed as unsafe when facing natural disasters. In the media, when portraying the aftermath of a flood, hurricane, or tornado, it is often manufactured or mobile homes that are shown, since these homes are usually the most devastated, due to a lack of being properly affixed to the foundation. This lack of safety is exacerbated when lenders consider manufactured housing to have more defects and faults that housing built on-site. These defects can occur in the factory, where attention is paid to low-cost production, or in the move from the factory to the site. Additionally, one of the biggest problems for these types of houses is that they are installed on rented land. If the owner of the land decides that he has a better use for it, then the house owner must either move the house or leave it. All of these factors add up to make manufactured houses look like very weak collateral. As such, many mainstream mortgage companies won’t finance them, and you’ll have to look for other options, such as a personal loan (these usually have much higher interest rates).

Despite all this, manufactured houses are extremely cheap when compared to houses built on-site, and this is a necessity for underprivileged communities. Laws have been recently passed which give owners of these houses more rights, and the government has also upped the building code to make sure that the quality of the houses themselves are improved. To fix the rented land problem, some manufactured housing owners have started local co-ops to buy large portions of land exclusively for that purpose.

When taking a mortgage, you must pay back to the lender not only the money directly borrowed, but also interest and other fees – this is known as the “cost of credit,” just another way of saying “the cost of borrowing money.”   This seems like a simple concept, but is often confusing and convoluted when borrowers actually need to shop for a mortgage.  This is because there are so many potential fees and other costs that could apply to any specific mortgage, so comparing them directly is nearly impossible.  In order to combat this confusion, the Truth in Lending Act regulates the APR or Annual Percentage Rate.  The APR is an attempt to be an expression of the cost of borrowing money, and usually includes the interest rate, points, origination fees, etc.

Essentially, the purpose of the APR was so that borrowers shopping around for a mortgage could easily compare different lenders in terms of the total cost of the loan.  However, some argue that the APR is not a true illustration of the total cost of borrowing.  For instance, the APR usually does not include one-time feeds that are paid to someone besides the lender, such as attorney’s fees, late penalties, appraisal feeds, or credit report costs.  While this is not true of every lender, those that do not disclose all the necessary fees in the APR make it harder for the customer to get an accurate comparison of different companies.

Some shoppers for mortgages should ignore the APR, including those who expect to sell or refinance within a short period, those looking to raise cash, and those who need a high-rate loan or negative points.  These individuals should pay closer attention to specific prices for fees and work out the best mortgage individually.

The lock period is the period during which the lender guarantees the rate and points associated with the mortgage. If the lock period is 30 days, at 3 points and 5.5%, the lender is required to make the loan at that price any time within the 30 days. After that, the lock period may be extended for a small fee if rates haven’t raised, or if they have, the new lock period will include a new, higher rate. If you have some difficulty qualifying at today’s rates, you will want to lock in a mortgage as soon as possible, to avoid further potential rate and/or point increases. Additionally, you’ll want to select a period long enough to cover the closing date of the loan, as well as a buffer period of 2 weeks. This way, in case there are any unforeseen problems, you will still have the rate and point combination that you locked in. There is also the possibility of taking a risk and waiting to lock in. If rates haven’t risen for 15 days during a 30 day lock period, the number of points you have to pay may drop a little in order to encourage people to obtain the mortgage.