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As of 2025, only 26% of people say now is a good time to buy a house according to a Gallup poll. This is probably due to high home prices and high interest rates. The median home price currently sits at $438,357 and mortgage rates as of May 2025 are 6.86% for 30-year fixed-rate mortgages and 6.01% for 15-year FRMs.

We’ve seen higher interest rates in the past year, so now may not be the worst time to buy. However, whether or not now is a good time to buy a house depends heavily on your unique financial situation and local market dynamics.

Determining When You’re Ready to Buy

Before you assess the current real estate market and pay close attention to interest rate fluctuations, it’s important to understand your financial and personal situation.

Here are a few factors you may want to consider before deciding if a new home is a good play right now.

Making Room in the Budget

When buying a home, the first thing you’ll need to budget for is a down payment.

While 20% of the home’s value is the benchmark, you may only need 3.5% if you apply for an FHA loan. But even 3.5% can be a chunk of change. If you want to buy a $200,000 house, 3.5% is $7,000.

Your home-buying budget should be large enough to cover a down payment as well as closing costs, which typically include homeowners insurance, appraisal fees, property taxes, and any mortgage insurance.

Remaining Consistent

How long do you plan to live in the city where you’re eyeing a home? If you plan on staying in the home long-term, now could be a good time to buy because staying put will give your home time to appreciate (subject to market fluctuations).

Since mortgage lenders pay close attention to job consistency and a steady income, you may also want to consider your job security. Especially during uncertain times, it’s crucial to feel confident knowing you can make your mortgage payments every month.

💡 Quick Tip: Buying a home shouldn’t be aggravating. Online mortgage loan forms can make applying quick and simple.

Checking Your Financial Profile

It’s a good idea to check your financial profile. Doing so may help you secure better financing terms when you purchase a home. Lenders will review your credit history, debt-to-income ratio, and assets, among other factors, to determine your eligibility for a mortgage.

Lenders review your credit history to gauge your creditworthiness and the level of risk to lend you money. They look at your debt-to-income ratio to indicate how much of your income goes toward debt payments every month.

If your ratio is high, it can show you’re overleveraged, which may mean you’re not in a position to take on more debt like a mortgage. You may also face a higher interest rate.

Last, a mortgage applicant can list assets like cash and investments. The more assets you have, the less risky lenders view you.

Weighing Renting Vs. Buying

You may want to compare renting vs. buying a home.

If renting a home in your community is less expensive than buying, you may want to hold off on a home purchase. Conversely, if renting is more expensive, you may be more eager to purchase a new home.

Overall, if you find that these factors point you in the direction of homeownership, it’s possible you’re ready to buy a home and can begin determining the perfect time to pounce.

Observing Interest Rates

When determining if now is a good time to buy a house, buyers should look closely at interest rates.

Financial institutions charge interest to cover the costs of loaning money when they offer you a mortgage. The interest rate they charge is influenced by the Federal Reserve, but mortgage-backed securities are considered to be the main driver.

When interest rates are low, borrowing money is less expensive for the borrower. As interest rates rise, borrowing money becomes more costly. The government has been holding rates steady recently.

But keep in mind that the rate and terms you qualify for will depend on financial factors including your credit score, down payment, and loan amount.

And, if interest rates go down after you purchase your home, you can always choose to refinance your mortgage in hopes of getting a lower rate.


💡 Quick Tip: A home equity line of credit brokered by SoFi gives you the flexibility to spend what you need when you need it — you only pay interest on the amount that you spend. And the interest rate is lower than most credit cards.

Timing the Real Estate Market

Essentially, to time any market, you want to aim to buy low and sell high. If you’re going to buy a property, you’ll want to ideally buy when there are more sellers than there are buyers—a buyer’s market.

In a buyer’s market, buyers have an abundance of homes to choose from. This may also give you leverage to ask for more concessions from sellers eager to close a deal, such as a seller credit toward your closing costs or help covering the cost of repairs.

Conversely, in a seller’s market, real estate inventory is low and demand is high, which may drive up home prices.

To identify the current market conditions, you may want to visit real estate websites like Zillow, Redfin, Realtor.com®, or Trulia to look at inventory in your area or ZIP code.

Typically, it’s a buyer’s market if you see more than seven months’ worth of inventory.

If you see five to seven months of inventory, you’re in a balanced market that isn’t especially beneficial to buyers or sellers.

It’s a seller’s market when there is less than five months’ worth of inventory.

Recommended: How Does Housing Inventory Affect Buyers & Sellers?

Understanding Local Economics and Trends

Because prices can vary vastly vary from area to area, real estate is often considered a location-driven market. This means that general rules of thumb might not be valid in every region or city.

Also, local economics may play a role in housing demand. For instance, if a large company decides to move its operations to a city, that city may experience a housing boom that creates a spike in home prices.

That’s why hopeful buyers will want to pay close attention to the economic happenings and housing trends in their desired location.

The Takeaway

If you find a home that seems right for you, your employment is stable, and you can get a home loan with a good interest rate, buying may make sense. Then again, with interest rates and home prices still being on the high side, comparing the costs of renting and buying may be called for.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

FAQ

Should I buy a house before rates drop?

House prices are predicted to continue rising, though at a slower rate. If you buy a house later, you’ll probably be paying more for it. If, however, you get a mortgage now and rates go down, you can consider refinancing to get the benefit of the lower rate.

What time of year is it cheapest to buy a house?

Generally speaking, you may be able to get the cheapest deal on a house in the winter. That’s because winter tends to be the slowest season for home sales and that may give you some leverage to bargain with homeowners who are in a hurry to sell. Of course, prevailing market conditions at the time will also play into how good a price you can get.

Is it better to buy a house during a recession?

There may be advantages and disadvantages to buying a house during a recession. The house price and the interest rates are likely to be lower than they might be when the economy is stronger. However, your individual financial position and job security may not be as strong during a recession, which can lead to financial stress.

About the author

Ashley Kilroy

Ashley Kilroy is a seasoned personal finance writer with 15 years of experience simplifying complex concepts for individuals seeking financial security. Her expertise has shined through in well-known publications like Rolling Stone, Forbes, SmartAsset, and Money Talks News. Read full bio.

SOHL-Q225-176

Reasons for paying off your mortgage early include eliminating monthly mortgage payments, saving money in interest, reducing financial stress, and more. But, just because you can pay your mortgage off early doesn’t necessarily mean you should.

Should You Consider an Early Mortgage Payoff?

It can be tempting to rush to pay off your home loan when you have the ability to, especially if you’ve struggled with debt management. And why wouldn’t you want to pay off your mortgage? Getting rid of debt could potentially increase cash flow.

When it comes to your mortgage loan, paying it off early depends on your unique financial situation and goals — there is no one right answer.

Reasons Not to Pay Your Mortgage Off Early

While it may seem like there are no reasons not to pay off your mortgage early, that is actually not the case. Here are a few reasons why it may not be a good idea to pay off your mortgage loan early:

You Have a Competitive Interest Rate

Unless you’ve reached all of your financial goals, it may not make the most sense to pay off your mortgage early when you have a competitive interest rate.

For example, if you are saving to send your child to college or you’re trying to rebuild your emergency fund after a home repair, those projects might take priority.

You could also possibly earn more by investing your money as opposed to paying off your loan. If that’s the case, it doesn’t make sense to pay off your mortgage early unless you want the peace of mind that comes with no mortgage debt. Investment decisions should be based on specific financial needs, goals, and risk appetite.

You Would Have Nothing Left in Savings

If you only have enough in the bank to cover your mortgage, it is not advisable to pay it off. Having an emergency fund is necessary and may take priority over not having a mortgage payment.

You Might Face a Prepayment Penalty

Make sure to review your mortgage terms closely. Some lenders charge an early payoff penalty, usually a percentage of the principal balance at the time of the payoff.

You Might Miss Out on the Mortgage Tax Deduction

For many people who itemize, having a mortgage helps push their itemized deductions higher than the standard deduction. It’s worth discussing the mortgage tax deduction with your accountant or other tax professional before you resolve to pay your mortgage off early.

You Have Other High-Interest Debt

If you have other high-interest debt, such as credit card debt, personal loans, or student loans, it may make sense to pay those off in full prior to paying your mortgage off early. Home loans typically have the lower interest rates of other forms of debt and are considered “good debt” by lenders. It only makes sense to pay off your mortgage early if you have no other debts in your name.

When an Early Payoff May Make Sense

On the flip side, there are some situations in which paying off a mortgage early might make more sense than waiting. Reasons to pay off your mortgage early may include:

You’ve Met All of Your Financial Goals

If your emergency savings account is right where you feel it needs to be and you’re diligently contributing to your retirement accounts, there may be no reason not to pay off your mortgage early.

Another idea, however, is to purchase an investment property instead of paying off your mortgage early. This can create a monthly cash flow in addition to the value of the property potentially appreciating over the years.

You’re Interested in Being 100% Debt-Free

Sometimes, just the idea of having loan payments can be mentally taxing, even if you’re in a good place financially. Money is not just about numbers for many; it’s also about emotions.

If paying off your mortgage loan early relieves anxiety because it’s helping you become debt-free, then that might be something to consider.

Of course, reflecting on why you want to become debt-free is important when thinking about paying your mortgage off. If, for example, it’s because you’re approaching retirement and will no longer be getting a steady paycheck, it might make sense to pay off your mortgage.

Recommended: How to Pay Off a 30-Year Mortgage in 15 Years

Ways to Pay Off a Mortgage Early or Faster

If you’ve decided it makes sense for your financial situation to pay off your mortgage early, here’s how you can do it:

Lump sum. The easiest way to pay off your mortgage early is by making one lump-sum payment to your mortgage lender. Contact your lender prior to making the payment so you can make sure you’re paying exactly what you owe, including any possible prepayment fees.

Extra payments. You could potentially pay more toward your mortgage principal each month if you got a raise at work or you’ve trimmed some fat in your budget.

If you make extra payments toward your mortgage, it could lead to paying off the loan faster than if you were just to make the set payment each month. Make sure to contact your lender prior to making extra payments, though, so you know the extra amount is being applied toward the principal amount only, not the principal and interest.

Refinancing. Another option for paying off your mortgage early is refinancing. Refinancing your mortgage means replacing your current mortgage with a new one, ideally with a better rate and/or term.

If you shorten your loan term from 30 years to 15 years, for example, it may increase your monthly payments but in turn allow you to pay your mortgage off faster. Home loans with shorter terms often come with lower interest rates, too, so more of your monthly payments will be applied to the loan’s principal balance.

The Takeaway

Should you pay off your mortgage early? Maybe. If your retirement account is fully-funded, you have no other high-interest debts, and you’re interested in becoming 100% debt-free, it may make sense to pay off your mortgage early. However, if you do not have fully funded retirement and emergency savings accounts or you could make more money by investing rather than paying off your mortgage debt, it could be best to hold off on paying your mortgage off early.

One way to save on interest and possibly pay off your mortgage early is by refinancing. Refinancing can allow you to lower your interest rate and shorten your loan term, if desired.

SoFi can help you save money when you refinance your mortgage. Plus, we make sure the process is as stress-free and transparent as possible. SoFi offers competitive fixed rates on a traditional mortgage refinance or cash-out refinance.

FAQ

Is it ever worth paying off your mortgage early?

It can definitely be worth paying off your mortgage early in some circumstances. If you have enough money in your emergency fund and your retirement savings, and you can’t make more money investing elsewhere, it may make sense to pay your mortgage off early. And if you’re in good shape financially and averse to debt, it can make sense to pay your mortgage off early for peace of mind.

Is there a tax disadvantage to paying off your mortgage early?

If you pay off your mortgage, you will no longer be able to take a deduction on your mortgage interest. It is possible that this could mean you can’t itemize, which might increase the amount you have to pay in taxes.

What happens after you pay off your mortgage?

Once you’ve paid off your mortgage, you fully own your home and don’t have to make payments on it every month. You will, however, have to pay property taxes and homeowners insurance.

Do extra payments automatically go to principal?

No, when you pay extra money on your mortgage, it does not necessarily go to principal. Not all lenders accept principal-only payments, but you can check with yours to see if they do and find out what the process is. After you start making the payments, it’s a good idea to check and make sure they are being applied properly.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

SOHL-Q225-185

Whether you’re relocating down the block or across the country, a lot of work and planning goes into moving. For current homeowners, there may be more logistics when they’re simultaneously buying and selling houses.

If you’re figuring out how to sell and buy a house at the same time, there are some options to choose from based on your personal budget, situation, and tolerance for risk.

Although this situation can be complex, it is not uncommon. In fact, 61% of home buyers owned their previous residence.

To help you manage this juggling act, this guide will go over potential challenges and outline some alternative options and tips to close on both deals.

Evaluating the Local Housing Market

Taking stock of the local housing market can help inform how you sell and buy a house at the same time. Not only does the market influence home prices, it can also impact how long it takes to close on a sale or purchase.

You may be faced with a housing market that favors buyers over sellers or vice versa. Researching your local housing market ahead of time can help guide your efforts in finding a new house.

When It’s a Buyer’s Market

A buyer’s market has more houses for sale than people actively looking to purchase a home. Generally, finding a new house in areas with a higher concentration of sellers can be easier than selling. At the same time, an accurate listing price and contingencies can factor into the equation.

Since there is less competition in the market, buyers can consider requesting an extended closing to allow time to sell their own house or include other contingencies in their offer. For instance, a home sale contingency can be included in a contract to coordinate a purchase with the sale of the buyer’s house.

A home sale contingency asks for the patience of a seller depending on their situation. Complications may arise in the event that all parties involved are simultaneously buying and selling homes.

On the flip side, sellers in a buyer’s market could benefit from setting a competitive asking price and getting ahead of inspection by buttoning up any lingering home maintenance issues.

When It’s a Seller’s Market

If there are more buyers in the housing market than there are homes for sale, it’s considered a seller’s market. Often, selling a house where there’s a high percentage of homebuyers takes less time and can fetch a higher price.

Sellers may be able to take advantage of the housing scarcity and go with a more ambitious asking price. If this pays off for you, the extra cash could be especially useful if you are shopping for houses in a seller’s market yourself. Making a competitive offer may be helpful if you are trying to beat out other bids and quickly secure a home.

It’s also not uncommon for houses to receive multiple offers in a seller’s market. If this is the case, sellers may have more success negotiating favorable terms that suit their sell and buy situation.

For example, a rent-back agreement allows sellers to lease their former house from the new owners for a set period of time. This gives them more time to find their new home, but may not be an acceptable condition for every prospective buyer.

Recommended: How Does Housing Inventory Affect Buyers & Sellers?

Calculating Home Equity

Getting your finances in order to buy and sell a home isn’t just about counting savings and building budgets. Home equity is another important consideration.

To calculate home equity, subtract the money owed on your mortgage loan from the current market value of your house. For example, if your home is worth $250,000 and you still owe $150,000 on your mortgage loan, you have $100,000 of equity in your home.

Depending on your financial situation, home equity may be necessary to buy a new home. Keep in mind that equity does not become available until the closing is complete. Typically, lenders will limit borrowers to 80% to 90% of their available equity, depending on factors such as credit history and income, among others.

Unless you’re selling a home shortly after buying it, the current market value of a home could likely differ from the initial purchase price. These changes could either increase or decrease your home equity.

Generally speaking, the average home sale price in the United States increases year-to-year, barring notable exceptions like the 2008 financial crisis and subsequent recession. However, these trends don’t account for regional housing booms and busts.

Getting an official valuation from a real estate appraiser, which typically costs between $300 and $400, is one way to get a more accurate idea of your home equity and a feasible sale price. Researching comparable homes that recently sold in your community can give you a ballpark estimate, too.

💡 Quick Tip: You can use money you get with a cash-out refi for any purpose, including home renovations, consolidating other high-interest debts, funding a child’s education, or buying another property.

Prequalification vs Preapproval

Being aware of your personal financial situation is useful for a variety of reasons, especially when buying a house. But if you’re among the majority of buyers who finance their home purchase, your mortgage lender will consider factors beyond your own number crunching and goals when deciding on their loan offer.

For many prospective homebuyers, prequalifying is the first step to getting an estimate of how large a home loan they would likely qualify for. Lenders generally evaluate factors like a buyer’s debt, assets, and income, which may take just a matter of days.

Becoming prequalified does not lock buyers into a set mortgage rate. Rather, it gives them a more accurate picture of their financing options and what houses are in their price range. Before making an offer, it is generally advisable that buyers get prequalified, which they can demonstrate with a letter from their lender. This can signal to the sellers that they are a serious buyer.

To ultimately obtain a mortgage loan, buyers still need to go through preapproval. In this process, lenders perform a more thorough credit and financial background check to arrive at a specific preapproved loan amount.

Sellers may consider offers from preapproved buyers more favorably than those with just prequalification since there is less concern about a rejected mortgage application pending a deal. Preapproval may also get you to the closing table faster, which can be a big plus if you’re in a competitive market.

Selling Before Buying

Whether by intention or pure circumstance, you could find yourself a choice of selling your house before buying your next home.

Selling first can potentially be beneficial for qualifying for a mortgage loan. After the sale closes, you may be able to use that money to finance a down payment on a new home, as well as having a lower debt-to-income ratio.

Yet, selling before buying may create complications like finding a place to stay until you purchase a new home. If the new buyers are not willing or able to do a rent-back agreement, you may end up having to find temporary housing until you buy a new home.

Apartments and rental properties may require signing up for a lease of as much as 12 months. For prospective homebuyers, a lengthy rental commitment with penalties for leaving early may be costly. Instead, finding a month-to-month rental option can grant more flexibility and sync up with a storage unit lease, if needed.

Buying Before Selling

When you find your dream home, you may want to pull the trigger and make an offer right away. But what does that mean if your house hasn’t sold yet?

If your budget allows you to buy a home with cash vs. a mortgage, you may be in a position to move forward with the offer.

For some, making a down payment or home purchase before selling with savings alone is not feasible. In other cases, your debt-to-income ratio and credit may prevent you from getting a feasible.

There are several options available if this is not the case. A home equity line of credit (HELOC) can let prospective buyers borrow against the equity of their current home. A buyer’s credit and existing home equity are taken into account when a lender is evaluating whether they qualify for a HELOC.

If approved, buyers can use the HELOC to access money for a down payment and then pay it off when their house sells. Take note of the repayment terms and interest rate on the HELOC, as these can vary from lender to lender.

Taking out a bridge loan is another possibility. These short-term loans are usually structured to cover a down payment and become due after several months. Bridge loans generally have high interest rates and may require an origination fee. Sellers who cannot unload their house in time may need to request an extension or begin repaying the loan while still paying two mortgages.

Choosing a Real Estate Agent

A savvy real estate agent can help reduce the stress and uncertainty of selling and buying a house at the same time. Their expertise can come in handy for setting a realistic listing price, scheduling showings, and staging a home.

If you had a positive experience with the agent you worked with to buy your home, their familiarity with your property could help expedite the process and give you peace of mind in case you have to move out of the area before selling.

There are benefits to using the same agent for buying and selling when geography allows. For instance, they can simplify the lines of communication and more easily coordinate the closing of both homes with your ideal timeline.

Sometimes it may not be possible to use the same agent. The obvious case is when you’re moving a significant distance to a new area.

The need to use two real estate agents could arise if you’ve chosen a reputable agent who exclusively works with buyers or sellers alone. If you decide to hire such an agent, they may be able to recommend a trusted colleague in their agency to handle your other deal.

Timing Your Closing Dates

There is a lot to consider when selling and buying a house at the same time. The timing of both dates can impact what your financing options are, whether you have to find temporary housing, and it you’ll need to store or move your belongings.

Setting a closing date is part of the negotiating process for any real estate deal, and coordinating closings for the same date can streamline the process.

Still, closings can be delayed due to reasons outside your control. Having a back-up plan, such as a rent-back agreement, can keep you in your home while you find a new house. Putting additional contingencies in a contract can help with rescheduling closings as needed or even walking away without much financial loss.

The Takeaway

Buying and selling houses at the same time may not always be easy, but it is doable. It’s ideal to have both closings the same day. But if that’s not possible, there are still ways you can accommodate either buying a house before you’ve sold your old home, or selling your house before you have a new place to live. Either way can work, but if you sell before you buy, it may be easier to get a mortgage on your new home.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

FAQ

Is it better to sell your house first before buying another?

If you can, it may be more practical to sell your house before you buy the next one. That way, you can use the funds from the sale to finance your new house’s down payment, and you avoid the possibility that you might have to pay two mortgages at once. However, if there’s a gap between when you sell your old house and when you close on your new one, you’ll have to figure out temporary lodgings.

What happens to your mortgage when you sell your house and buy another?

When you sell your house, if there’s still a mortgage outstanding on it, you will have to pay it off at the closing. Typically, your mortgage lender will be paid with some of the money you get for the sale of your house. That’s the usual process whether or not you are buying another house.

What is the minimum credit score for a bridge loan?

Qualifications for bridge loans can be demanding. The minimum credit score for a bridge loan can vary by lender, but typically it will be 700 or or more.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SOHL-Q225-178

If you’re looking for a cheaper alternative to a traditional house, you might consider buying a mobile or manufactured home. The price of one of these homes is typically much lower than the cost of a standard single-family home. Plus, these homes aren’t necessarily temporary. These days, factory-made homes can be just as permanent as houses that are built on-site. They can also be customized in many of the same ways as a traditional home. (In this article, we’ll use the term “mobile home” when we’re talking about both mobile and manufactured homes.)

While mobile homes don’t always qualify for a traditional mortgage, there are several types of financing that can help make buying a factory-built home more affordable. Read on for a closer look at the process of buying — and financing — a mobile, manufactured, or modular home.

What Is the Average Cost of a Mobile Home?

According to the Census Bureau’s December 2024 Manufactured Housing Survey, the average price of a new manufactured home is $121,700.

More specifically, the average price for a single-wide mobile home is $86,700 and average for a double-wide mobile home is $148,700.

However, mobile home prices can vary significantly by region. The highest prices right now tend to be in the West, where the average cost of a new mobile home is $98,600 for a single-wide and $148,800 for a double-wide.

The lowest prices are currently in the Northeast, where the average price for a single-wide is $86,200 and average cost of a double-wide is $144,800.

In the Midwest, a single-wide mobile home averages $95,600 and a double-wide averages $152,900, while in the South, a single-wide mobile home averages $84,300 and a double-wide averages $148,300.

Recommended: How to Budget for Buying A House

Differences Between a Mobile Home, Modular Home, and Manufactured Home

The terms mobile home, manufactured home, and modular home are often used interchangeably. While all three refer to homes built in a factory rather than on-site, there are some differences between them. Below, we break it down.

Mobile Home

A mobile home is a prefabricated home built on a permanent trailer chassis that was constructed prior to June 15, 1976. That is when the U.S. Department of Housing and Urban Development (HUD) enacted the National Manufactured Housing Construction and Safety Standards Act. After that date, new safety standards went into effect, which led to a new designation for these homes.

Manufactured Home

Like a mobile home, a manufactured home is built almost exclusively in a factory rather than on-site. However, these homes were built after June 15, 1976, when HUD put new safety standards into effect for mobile homes and changed the name of these structures from “mobile” homes to “manufactured” homes.

Another difference between mobile and manufactured homes is that manufactured homes typically are not moved after assembly. That said, it is possible to move a manufactured home if it has a pier and beam foundation. Manufactured homes need to not only meet HUD standards but also local building standards for the communities where they will be located.

Recommended: How Much Does It Cost to Build a Manufactured Home?

Modular Homes

Like mobile and manufactured homes, modular homes are built in a factory and shipped to the land where they will be set up. However, modular homes are often delivered in two or more modules (hence the name) that are then put together on-site by a contractor.

Modular homes are not designed to be relocated and are placed on a permanent foundation. Once put together, these homes have a lot in common with on-site built homes. They may have a basement and/or crawlspace, come in a variety of layouts, and can be one or two stories.

Like manufactured homes, modular homes must adhere to local building codes.

💡 Quick Tip: Buying a home shouldn’t be aggravating. Online mortgage loan forms can make applying quick and simple.

Things to Consider When Buying a Mobile Home

To find the best mobile home for your needs, here are some things to keep in mind.

Location

As with any home purchase, location is key. You can install your mobile home on land you already own, or purchase land for your mobile home. In either case, you’ll want to make sure that local zoning regulations allow for the installation of mobile homes and that the local utilities are able to connect a mobile home.

Another location option is to rent a plot of land in a mobile home community. If you find a community you like, it’s a good idea to ask what their restrictions are for home size and features before you buy a mobile home.

Size

Mobile homes are usually classified by their width. A single-wide is typically about 15 feet wide and around 70 feet long. A double-wide mobile home is usually the same length or longer but double the width — around 30 feet wide.

Due to their long, narrow shape, single-wide homes have fewer floorplan options and may work best for individuals or couples. Double-wide homes offer more space, as well as design options, and can be ideal for larger families.

Keep in mind that larger homes will, of course, be more expensive and also require a larger lot.

New vs Used

These days, you find new manufactured homes with all kinds of bells and whistles, including vaulted ceilings, walk-in closets, and luxurious bathrooms. If you’re looking to save money, however, you might consider going with a used mobile home. Just keep in mind that a used home may show signs of wear and tear (depending on how well it was maintained) and that some mobile home sites don’t allow homes made before a certain date.

Financing a Mobile Home

Once you’ve decided on the type and size of mobile home you want to buy, it’s time to figure out how you are going to pay for it. While it can be harder to find a loan for a mobile home than a traditional home, there are still a number of options. Here are some to consider.

Fannie Mae Mortgages

While not all lenders finance manufactured homes, some may offer Fannie Mae’s MH Advantage program. These loans come with terms of 30 years, competitive rates, and down payments as low as 3%.

However, they also come with strict qualification criteria: The manufactured home must be at least 12 feet wide, have a minimum of 600 square feet, and can’t be on leased land. The home also needs to have a driveway and a sidewalk that connects it to the driveway, carport, or detached garage.

Freddie Mac Mortgages

Another option for manufactured home financing is the Freddie Mac Home Possible mortgage program. This program offers 15-, 20- and 30-year fixed-rate loans, as well as adjustable-rate mortgages. Like Fannie Mae, these loans typically come with low rates and down payments as low as 3%. Freddie Mac loans also have strict criteria for qualification: The home must be considered real property, have at least 400 square feet of living space, and be built on a permanent chassis.

FHA Loans

The Federal Housing Administration (FHA), which offers loans for traditional homes with flexible credit and down payment requirements, also offers manufactured home loans called Title I and Title II loans.

You can use a Title I loan to buy a manufactured home (but not the land it sits on), provided that the property is your primary residence, is connected to utilities, and meets FHA guidelines. These loans typically come with terms up to about 20 years and relatively low loan amounts.

Title II loans, by contrast, can be used to purchase both a manufactured home and the land it sits on together. However, the home must count as real property and have been built after 1976.

US Department of Veterans Affairs (VA) Loans

If you’re a member of the military community, you may be able to qualify for a loan insured by the Department of Veterans Affairs (VA) to purchase a mobile or manufactured home. To qualify for a VA loan for a manufactured home, your home must be on a permanent foundation, meet HUD guidelines, and must be on land you own. These loans often offer 100% financing with no money down; maximum terms can range from 20 to 25 years.

💡 Quick Tip: You never know when you might need funds for an unexpected repair or other big bill. So apply for a HELOC (a home equity line of credit) brokered bySoFi today: You’ll help ensure the money will be there when you need it, and at lower interest rates than with most credit cards.

Chattel Loans

A chattel loan is a loan designed to purchase different types of expensive personal property, such as cars, boats, and mobile homes. You don’t have to own the land your home will sit on to get a chattel loan, so this can be a good option if you plan to rent a space in a mobile home community. Some lenders also offer chattel loans that are insured by the FHA, VA, and the Rural Housing Service (RHS) through the U.S. Department of Agriculture.

Chattel loans typically have higher rates and shorter terms than traditional mortgages. Like a traditional mortgage, however, these loans hold the property being financed as collateral for the loan. That means that if you run into trouble making payments, the lender can seize and re-sell the mobile home.

Personal Loans

Since mobile homes generally cost far less than traditional homes, you may be able to finance your purchase through a personal loan.

Personal loans are typically unsecured loans with a fixed interest rate that can be used for virtually any purpose (including the purchase of a mobile home). These loans don’t have restrictions on how your mobile home is built, so you can likely qualify even if it’s fully movable and not attached to a permanent foundation. Also, personal loans don’t put your home at risk, and the application process and time to funding tends to be shorter than it is for other types of mobile home loans. However, interest rates may be higher.

While some lenders offer maximum personal loans of $40,000 to $50,000, others will let you borrow $100,000 or more. If you can find a larger personal loan, it may be enough to finance a mobile, manufactured, or modular home.

Recommended: How Much Is a Down Payment on a House?

Getting Approved for a Personal Loan

If you’re thinking about applying for a mobile home loan, here are some steps that can help streamline the process.

1. Check Your Credit Reports

Whenever you apply for any type of financing, a lender will likely look at your credit history to help them determine how much they will lend to you and at what rate (or if they will lend to you at all). It’s wise to look at your three credit reports, see where you stand, and make sure there aren’t any mistakes or inaccuracies that could negatively affect your credit. You can get free copies of your credit reports from the three consumer bureaus — Equifax®, Experian®, and TransUnion® — at AnnualCreditReport.com.

2. Determine Whether You’re Buying Land and a Mobile Home

This will determine how much money you need to borrow, as well as what your financing options are. Some lenders will only offer mobile home financing if the home will be permanently set up on land that you own.

3. Save For a Down Payment

While it’s not always required, you may also want to think about saving for a down payment on your manufactured or mobile home.

4. Find the Right Lender

Interest rates can vary from one lender to the next, so it can definitely pay to shop around and compare offerings from banks, credit unions, and online lenders. Some lenders will allow you to “prequalify” for a loan with a soft credit check (which doesn’t impact your credit score). This will allow you to get an idea of the loan amount and rate you may be able to qualify for before you officially apply.

The Takeaway

While mobile and manufactured homes are typically more affordable than a traditional home, you may still need financing to cover the cost of the purchase. You may be able to get a loan from the same sources as traditional mortgages (such as FHA and VA loans). Other options include specialized manufactured home loans through Fannie Mae and Freddie Mac, chattel loans, and personal loans.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

FAQ

Can you get a personal loan for a mobile home?

Yes, a personal loan can be used to buy a mobile, manufactured, or modular home. Applicants will need to meet qualification requirements of the lender they’re working with.

What is the maximum personal loan amount for a mobile home?

The maximum loan amount depends on the lender. Many have maximum loan amounts of $40,000 and $50,000 but some will offer up to $100,000. The amount you can borrow will also depend on your income, credit score, and other factors.

Where can I get a personal loan to buy a mobile home?

Traditional banks, credit unions, and online lenders may offer personal loans to buy a mobile or manufactured home.

^†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
^¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SOHL-Q225-067

If you’re looking into getting a mortgage for the first time, congratulations! You’re about to embark on a brave new adventure, full of highs and lows with (ideally) a wonderful reward, aka your new home, at the finish line.

But before you get there, you’ll need to navigate some challenges. For instance: the somewhat intimidating home-buying terminology: prequalification vs. preapproval, for instance. And what on earth is escrow? And what does amortized mean?

Here, you’ll learn the answer to that last question, quickly and painlessly. Basically, mortgage amortization means that your mortgage loan payments will be spaced out over a period of time (typically 30 years) and will be calculated so that you always pay the same amount per month (if you have a fixed-rate mortgage, not a variable rate mortgage, that is).

That means that if you get a fixed-rate mortgage and your first payment in your first month is $1,500, you know that you’ll pay $1,500 in the last month of your mortgage, years later. If you take out a variable rate mortgage, the amount you pay each month will change periodically as the market rate fluctuates.

Also, as you make mortgage payments at first, most of the money paid goes toward interest and a little to the principal, but that shifts over time to the opposite scenario.
Learn more about mortgage amortization here.

Why Do People Choose Amortized Mortgages?

Mortgage amortization helps ensure that your obligations are predictable, which can make it easier for you to plan. If you take out a 30-year mortgage, then the amortization helps guarantee that in 30 years, you will have finished paying it off. For a fixed-rate mortgage, amortization also keeps all your payments consistently the same amount, rather than different amounts that depend on how much your principal is.

Recommended: The Different Kinds of Mortgages

How to Calculate Amortization Using Tables

In real life, even if you choose an amortized mortgage, you may never need to figure out your 30 years or so of payments yourself. But it’s useful to see what goes into the table of payments (they’re not arbitrary!) and understand how it’s populated. Calculating your amortized mortgage really puts you on the front lines of homebuying.

Let’s say you take out a $300,000 mortgage over 30 years at a 6.50% fixed interest rate. That means your monthly payment will be $1,896. You can then divide your interest rate by 12 equal monthly payments to get your monthly interest rate. That works out to 0.5417% of interest per month. And multiplying that interest rate by your total balance, which at the time of your first payment is $300,000, shows that in the first month of your loan, you’ll pay around $1,625 toward interest and the remaining $271 toward your principal.

Next, to calculate the second month, you’ll need to deduct your monthly payment from the starting balance to get the ‘balance after payment’ for the chart. You’ll also need to put the $1,625 you paid in interest and $271 you paid toward the principal in the chart. Then you can repeat the calculation of your monthly interest and principal breakdown, and continue inputting until you finish completing the chart.

💡 Quick Tip: SoFi’s new Lock and Look* feature allows you to lock in a low mortgage financing rate for up to 90 days while you search for the perfect place to call home.

How to Calculate Amortization Using a Calculator

So you can see that it’s not so much difficult to calculate your amortized payments as it is time-consuming. Fortunately, you can save yourself the trouble by using an online amortization calculator . All you have to do is input info about your mortgage, including the amount you’re borrowing, your term length, and the interest you’re paying, and the calculator will do the math for you.

Recommended: First-Time Homebuyer Guide

What Are the Pros of an Amortized Mortgage?

Here are some of the benefits to consider:

•   You’ll slowly but surely pay off the mortgage principal of your home loan. With every month, you’ll get closer to owning your home outright!

•   It ensures that you pay a set amount for each payment over the life of your loan. With some loans you may end up paying more at the beginning or the end. A balloon mortgage, for example, requires you to pay interest charges monthly during the regular term. You then pay off large parts of the principal at the end of the loan period. (Thus, your payment literally balloons.)

•   You can often get better terms with an amortized loan. And you’ll save money in the long run if you’re paying less interest over the life of your mortgage.

Recommended: What Is PMI and How to Avoid It

What Are the Cons of an Amortized Mortgage?

Next, consider the downsides:

•   Amortized mortgages may favor borrowers who are putting down a larger down payment. To qualify for a competitive interest rate, you’ll probably need to put down 10% (if not 20%).

•   You might not be able to qualify to borrow as much money via an amortized mortgage as you would through an alternative mortgage, such as an interest-only mortgage or a balloon mortgage.

The Takeaway

An amortized mortgage can be a good option for many homebuyers. It provides a steady way to pay down the principal of your home loan.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

FAQ

Is it better to have a longer or shorter mortgage term?

It depends on what you can afford. If you have a shorter mortgage term, your monthly payments will be higher, but you will pay less in interest over the (shorter) life of your loan. If your term is longer, your payments will be smaller, but you will be making them for longer and you’ll pay more in interest over the term.

Why are mortgage loans amortized?

Mortgage loans are amortized so that homeowners will pay the same amount of money every month during the duration of their home loan, even though the balance between how much of that payment is for principal and how much is for interest will change. The predictability makes it easier for both the borrower and the lender to plan.

What is the alternative to an amortized loan?

The alternative is called a nonamortizing loan, meaning a loan for which the payment isn’t paid back gradually, over time, but all at once in a lump sum. Balloon-payment mortgages and interest-only mortgages are nonamortizing mortgages.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.