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A 20-year mortgage is far less common than a 30-year mortgage, but when you want to pay a lower rate and save a substantial amount in interest, it’s worth considering a 20-year mortgage … with a big “if.”

If you can consistently afford the higher mortgage payments.

Here’s what you need to know about 20-year mortgages:

•   What is a 20-year mortgage?

•   How a 20-year mortgage compares with a 30-year mortgage.

•   Why people choose a 20-year mortgage?

•   The advantages and disadvantages of a 20-year mortgage.

What Is a 20-Year Mortgage?

A 20-year fixed-rate mortgage is a home loan whose total financing costs are calculated on a repayment term of 20 years.

Homebuyers and refinancers choose their mortgage term. The 30-year fixed-rate mortgage is the most popular. The 15-year fixed-rate mortgage sometimes shares the spotlight.

The 20-year mortgage merely gets less attention. A 20-year home loan may be a happy medium for homeowners who want lower monthly payments than a 15-year mortgage but who want to pay off the loan more quickly than 30 years.

Why Are 20-Year Mortgages Less Common Than 30-Year Mortgages?

When it comes to a 20-year vs. 30-year mortgage, why don’t more borrowers choose the shorter term? Because the monthly payments are higher.

A 30-year term makes a home more affordable on a monthly basis, even though homeowners will pay more over the life of the loan than they would over 20 years.

Buyers considering a 20-year home loan may need to lower the top end of their house-hunting price range so they can qualify for the mortgage.

In exchange for saving an awesome amount by financing with a 20-year loan, you may have to forgo HGTV-style perfection or buy a starter home.

Or downsize.

Recommended: How Much of a Mortgage Can I Afford?

Why People Choose 20-Year Mortgages

People who choose a 20-year mortgage do so because they will pay much less in interest than they would on a 30-year mortgage. That benefit stems from a shorter term and a lower interest rate.

Generally, the longer the term, the higher the rate on conventional conforming loans, FHA and VA loans, and jumbo loans.

An amortization table reveals how much interest is paid on a mortgage over the loan term. When you decrease the length of your mortgage in exchange for a higher monthly payment, the savings are substantial.

	20-Year Mortgage	30-Year Mortgage
Loan amount	$500,000	$500,000
Fixed interest rate	6.0%	6.25%
Monthly payment (principal & interest)	$3,582	$3,079
Total interest paid	$359,752	$608,289
Total paid (loan amount + interest)	$859,752	$1,108,289
Amount saved	$248,537

It might be shocking to see nearly $250,000 in interest savings by financing a home with a 20-year mortgage.

If you can swing it, good deal! Keep in mind, though, whether you’re a millennial homebuyer or retiree, that a 30-year mortgage may give you wiggle room with your budget if you need it.

You can always pay off a 30-year mortgage early if you make extra payments, especially toward the principal.

20-Year Fixed vs an ARM

In a time of rising rates, an adjustable-rate mortgage (ARM) may look good to a homebuyer who’s planning to stay put for just a few years. The introductory rate for a conventional ARM, jumbo ARM, or FHA or VA ARM may be lower than that of a fixed-rate mortgage.

Whether you’re interested in a 5/1 ARM, whose rate is fixed for five years and then will adjust once a year, a seven- or 10-year ARM, or any other adjustable-rate loan, you’ll want to know how long you plan to stay in the home and to fully understand the rate adjustments and caps.

Recommended: Online Mortgage Payment Calculator

Advantages of a 20-Year Mortgage

Fixed payments over 20 years: Your payment will be the same each month for the life of the loan.

Lower interest rate: 20-year mortgages typically have a lower interest rate than their 30-year counterparts. Lenders reward a shorter payoff date with a lower interest rate.

Pay less interest over 20 years: You’ll avoid 10 years of interest by paying on a 20-year loan instead of a 30-year loan.

Pay off mortgage sooner: A 20-year mortgage is scheduled to be paid off 10 years sooner than a 30-year mortgage.

Build equity more quickly: Equity is built faster with a 20-year loan than a 30-year loan. The sooner you can pay more on principal (which a 20-year loan naturally does), the sooner you’ll gain home equity.

Monthly payments still may be affordable: You may find that the payments for a 20-year loan are comfortable and doable.

Disadvantages of a 20-Year Mortgage

Higher monthly payment: A 20-year vs. a 30-year mortgage will result in a higher monthly payment. This may make it more difficult to qualify for other financing, such as investment property or cars.

Harder to qualify for: Because the monthly payments are higher, a 20-year home loan may be harder to qualify for than a 30-year loan.

Lower target price: If you’re in the home buying process and want to finance your new purchase with a 20-year loan, you may need to shop for a home at a lower price point.

Recommended: Buying in One of the 50 Most Popular Suburbs

The Takeaway

If you’re looking for a home loan that could save you a significant amount of money in interest, a 20-year mortgage might be right for you — if you can handle the higher monthly payments without fail. If you need lower monthly payments, a 30-year mortgage may be the better move.

SoFi offers fixed-rate mortgages with terms of 10, 15, 20, and 30 years. Low down payment options and competitive rates are just some of the advantages of SoFi Home Mortgage Loans.

Find your rate in minutes.

FAQ

20-year mortgage vs 30-year mortgage: Which has the better interest rate?

Decreasing the amount of time you repay your loan will help you save on interest costs in a big way. First off, the interest rate you’ll pay is typically lower. Second, your overall interest cost is much lower because you’re avoiding 10 years of interest that you would pay on a 30-year loan.

Is it harder to get a 20-year or 30-year mortgage?

A 20-year mortgage is harder to qualify for because the monthly payments will be higher for the property you want to purchase. If you’re determined to use a 20-year loan, you may find you’ll qualify for a lower purchase amount to get the numbers to work for your monthly budget.

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Photo credit: iStock/ArLawKa AungTun

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.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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The cost to build a duplex varies widely, based on many factors. The average approaches $390,000.

Understanding the nuts and bolts of constructing a brand-new two-unit structure gives a better sense of how much it will cost to build a duplex.

Let’s define duplexes and then examine estimates for building one.

What Is a Duplex?

Duplexes come in different sizes and designs, but they have commonalities, like:

•   One building, one lot. The two units are in one building on the same piece of property.

•   Common partition. Duplex units have a shared wall or ceiling/floor. Occupants may share the yard space and a laundry room.

•   Mirrored size or layout. The two residences in a duplex are often mirror images of each other or the same size.

In general, buying a duplex will cost less than a stand-alone single-family home in the same area.

And it might be cheaper to buy a duplex than build one, although you can customize new construction.

Then there are people who convert a single-family home into a duplex. That could cost $80,000 on average.

Duplexes are in demand, thanks to owner-occupant financing advantages and potential rental income. They also can be found among HUD homes for sale.

Factors That Determine the Cost of Building a Duplex

Plenty of factors influence the cost to build a duplex, with some choices stretching the budget more than others.

Location

In more desirable areas, the plot could really thicken in terms of price. Land prices in the Northeast tend to be the highest, with New Jersey terra firma the dearest.

Materials and Labor

Depending on supply and demand, the cost of materials and labor can vary dramatically. If there’s a shortage of labor or supplies, duplex builders may pay a premium.

Building a duplex, or any property from the ground up, requires specialized labor, including these pros:

•   Architect

•   Structural engineer

•   General contractor

If the lot has a property on it, the buyer may need to pay to demolish it before building a duplex. If the lot is bare, adding utilities such as plumbing, electricity, and gas will factor into the cost of the build.

Size of the Duplex

In general, the larger the structure, the higher the cost.

The more rooms and the more complicated the layout, the higher the price.

Type of Duplex

The type of duplex a person decides to build can affect the project’s cost. Here’s how the kind of duplex can influence its price tag:

•   Stacked ($95 to $135 per square foot). Stacking the units on top of each other will typically be the least expensive build, as it’s the most efficient. Owners may be able to save on labor as the units will mirror each other and save time on plumbing.

•   One-story, side-by-side ($110 to $180 per square foot). This is likely a more complex build.

•   Two-story, side-by-side ($130 to $220 per square foot). This type of duplex is even more complex and has more square footage than the above options.

Miscellaneous Factors

Depending on the lot purchased or desired features, there could be additional costs associated with the build. Common expenses include:

•   Tearing down an existing home. If there’s a property on the lot, it can cost between $7,500 and $15,000 to tear it down.

•   Interior design. While not required, hiring an interior designer could help both spaces feel more liveable and comfortable. The average interior designer costs between $75 to $450 an hour.

•   Modular duplex. A modular duplex, meaning buying a prefabricated home, costs $100, on average, per square foot.

•   Garages. If the duplex owner wants a garage or two attached to the home, they may pay $35,000 more.

How Much Does It Cost to Build a Duplex?

With an understanding of the cost factors that can affect the budget for the duplex, now it’s time to address the big question.

Here are overall costs, then costs based on labor and square footage using up-to-date national averages.

Overall Construction Cost

These are the high-end, low-end, and national averages to build a duplex.

High end	$1,100,000
Low end	$142,000
Average	$388,000

By comparison, building a new house of 2,500 square feet could cost $345,000. The average existing single-family home in the country sold for $376,700 in late 2022, according to the National Association of Realtors®.

Labor Cost

A large portion of the budget to build a duplex will go into labor and specialized professionals. Here’s an average of what someone can expect to pay for labor:

•   Architects: 10% to 15%

•   Structural engineer: $500

•   General contractor: 25%

•   Electrician: 8% to 12%

•   Plumber: 10% to 14%

•   Foundation: 8% to 10%

•   Framing: 10% to 12%

•   Exterior finish: 6% to 10%

•   Roofers: 8% to 12%

•   Windows and doors: 3% to 7%

•   Interior finish: 6% to 10%

•   Bathroom: 3% to 5%

•   Kitchen: 6% to 10%

Cost by Square Foot

Here’s a breakdown of average cost per square foot (including labor):

•   1,000 square feet: $95,000 to $220,000

•   2,000 square feet: $190,000 to $440,000

•   3,000 square feet: $295,000 to $660,000

•   4,000 square feet: $380,000 to $880,000

•   5,000 square feet: $475,000 to $1,100,000

The Takeaway

While building a duplex isn’t that different from building a single-family home, the process does include additional labor and considerations that can sway the budget dramatically. Size, style, and location can influence the cost to build a duplex.

Some people interested in building a new duplex will look for a construction loan, but if you’re a homeowner who’s eligible for a home equity line of credit, that could be a good source of funding.

SoFi brokers a HELOC that allows qualified homeowners to access up to 95%, or $500,000, of their home equity.

If you’re considering buying an existing duplex, check out SoFi Home Loans.

And here’s big news: A SoFi Jumbo Loan goes up to $3 million.

Getting prequalified is simple, and rates are competitive.

Start turning your duplex dreams into reality.

FAQ

Is it cheaper to buy or build a duplex?

Given the recent rising price of labor and materials, it is likely cheaper to buy a duplex than build one from the ground up.

How much do you have to put down to build a duplex?

A construction loan typically requires a 20% to 30% down payment. A HELOC or home equity loan could be used instead if you’re eligible.

How long does it take to build a duplex?

It takes 11.9 months on average to build a two- to four-unit residential building, not counting the time it takes to obtain permits, according to the U.S. Census Bureau’s latest Survey of Construction.

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Photo credit: iStock/Luckie8

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.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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Did you know you can use a home loan for renovations? Renovation home loans cover the cost of purchasing and renovating a home. If you’re familiar with construction loans, renovation loans are similar. Also called “one-close” loans or renovation mortgages, renovation loans can offer buyers simplified financing for transforming a fixer-upper into an attractive, modernized home.

We’ll explain how to add renovation costs to your home loan, and other ways you might want to use extra funds.

What Is a Renovation Home Loan?

A renovation home loan combines the cost of a home purchase and money for renovations in one mortgage. There’s only one closing and one loan when buying a new home or refinancing an existing home. The lender has oversight of the renovation funds, including the budget, vetting of the contractor, and disbursement of funds for renovation work as it is completed.

The borrower, their property, and their lender must all meet criteria set out by the remodel home loan program to qualify, which can present a challenge. Qualifying lenders in particular can be hard to find. That’s because most lenders must maintain a custodial account for the renovations over the course of an entire year, which requires extra work and resources. However, if you can find a lender that can handle the process, renovation loans can be a convenient way to improve a promising fixer-upper.

Types of Home Loans That Can Include Renovations

Most mortgages will not include renovations in the loan amount. Renovation mortgages are niche products serviced by a fraction of lenders. Buyers and properties must also meet certain requirements, which we’ll outline below.

There are several different types of home loans you can apply for that are eligible for adding renovation costs to the mortgage.

1. FHA 203K

An FHA 203(k) is a mortgage serviced by the Federal Housing Authority in which the cost of repairs is combined with the mortgage amount. It’s different from a traditional FHA loan that does not include improvement expenses, but qualifications (credit score, down payment, etc.) are very similar.

Interest rates and terms are also similar to what you see in a standard FHA loan. However, you can expect additional lender fees to cover the extra oversight needed on a renovation loan.

The amount you can borrow is equal to either the value of the property plus the cost of renovations or 110% of the projected value of the property after rehabilitation. Borrowers must use an FHA-approved lender for this type of mortgage.

Eligible properties must be one to four units. Repairs can include those that enhance the property’s appearance and function, the elimination of health and safety hazards, landscape work, roofing, accessibility improvements, energy conservation, and more. A limited 203(k) is also available for repairs costing $35,000 or less.

2. Fannie Mae HomeStyle

The Homestyle Renovation loan from Fannie Mae takes into account the value of the property after renovations are complete. The amount of allowable renovation money can equal 75% of the value of the property after renovations are complete.

In the world of home loans, the loan-to-value ratio (LTV) is the percentage of your home’s value that is borrowed. Many lenders limit your LTV to 80% to 85%.

A HomeStyle loan allows an LTV of up to 97%. This means it’s possible to put as little as 3% down. Some investment properties are also eligible for this type of loan. Renovations are eligible as long as they are permanently affixed to the property. Work must be completed within 15 months from the closing date of the loan.

3. Freddie Mac CHOICERenovation

The Freddie Mac CHOICERenovation program is virtually identical to the Fannie Mae HomeStyle program. This renovation loan is for buyers who want a loan with more flexibility than an FHA renovation loan.

Like HomeStyle, renovations that are permanently affixed to the property are eligible in one- to four-unit residences, one-unit investment properties, second homes, and manufactured homes. The maximum allowable renovation amount is 75% of the “as-completed” appraised value of the home — meaning the appraised value of the home before renovations but accounting for all planned changes. The maximum loan-to-value (LTV) ratio is 95% (97% for HomePossible or HomeOne loans).

The Freddie Mac CHOICEReno eXPress Mortgage is an extension of the CHOICERenovation mortgage. The CHOICEReno eXPress mortgage is a streamlined mortgage for smaller-scale home renovations. Renovation amounts are limited to 10% or 15% of the “as-completed” appraised value of the home. Borrowers need to work with an approved lender to apply for one of these programs.

4. USDA Purchase with Rehabilitation and Repair Loan

A USDA Purchase with Rehabilitation and Repair Loan assists moderate- to very-low-income households in rural areas with repairs and improvements to their homes. Buyers can secure 100% financing with this loan.

For very low-income borrowers, there’s a separate loan you can qualify for with a subsidized, fixed interest rate set at 1% with a 20-year term. This makes borrowing incredibly affordable.

To apply, you must have a household income that qualifies as low to moderate in your county per USDA standards. The property must be your primary residence (no investments), and rehab funds cannot be used for luxury items, such as outdoor kitchens and fireplaces, swimming pools and hot tubs, and income-producing features. Manufactured homes, condos, and homes built within the last year are not eligible.

5. VA Alteration and Repair Loan

The VA allows qualified service members to bundle repairs and alterations with the purchase of a home. As with all VA loans, 100% financing is available on these low-interest loans.

Alterations must be those “ordinarily found” in comparable homes. Renovations are also required to bring the property up to the VA’s minimum property standards.

The loan amount can include the “as completed” value of the home as determined by a VA appraiser. Leftover money from the home loan after renovations are complete is applied to the principal.

Home Style Quiz

Other Options for Financing Home Renovations

While a renovation home loan is a great way to finance a renovation, it’s not your only option for borrowing money for home improvements. Nor is it the most flexible. Alternative loans — such as cash-out refis, home renovation personal loans, and home equity loans -– have a lot more flexibility.

Cash-out Refinance

A cash-out refinance is where you replace your old mortgage with a new mortgage, and the equity (here, the “cash”) is refunded to the homeowner. You will have closing costs with a new mortgage, but you won’t have separate financing costs for the money you’re using for renovations.

Personal Loan

Personal loans are often used for a home remodel or renovation. Because the funds are not secured by your property, you’ll likely have to pay a higher interest rate. The bright side of funding this way means you won’t lose your home if you stop paying back the loan.

This type of loan comes with a shorter repayment period, higher monthly payment, and lower loan amount. You can find these loans through banks, credit unions, and online lenders.

Home Equity Loan

A home equity loan is a secured loan that uses your home as collateral. That means the lender can foreclose on the home if you stop paying the loan, and so interest rates are typically lower. A home equity loan also comes with a longer repayment period than a personal loan.

Home Equity Line of Credit (HELOC)

A HELOC is a line of credit that lets homeowners borrow money as needed, up to a predetermined limit. As the balance is paid back, homeowners can then borrow up to the limit again through the draw period, typically 10 years. The interest rate is usually variable, and the borrower pays interest only on the amount of credit they actually use.

After the draw period ends, borrowers can continue to repay the balance, typically over 20 years, or refinance to a new loan.

Recommended: A Personal Line of Credit vs. a HELOC

Private Loan

A private loan is a loan made without a financial institution. Loans made from a family member, friend, or peer-to-peer source are considered private loans. Qualification requirements will depend on the individual or group lending the money. There are some serious drawbacks to obtaining funding from a private source, but these loans can help some borrowers in buying a home.

Government or Nonprofit Program

It is possible to finance the cost of remodeling with the help of government programs. Federal programs like HUD have financing options for renovations, as do some state and local government agencies.

Recommended: What Is HUD?

The Takeaway

Homeowners have a lot of options for financing renovations, especially in an era when home equity is higher than ever before. Renovation home loans allow borrowers to purchase and renovate a property with one loan, but that’s not the only way you can remodel a fixer-upper. Some alternatives to renovation home loans include home equity loans, HELOCs, and personal loans.

A HELOC allows owners to pull from their property’s equity continually over time. A HELOC brokered by SoFi allows homeowners to access up to 95% of their home’s equity, or $500,000, and offers lower interest rates than personal loans. Borrow what you need to finance home improvements or consolidate debt.

Learn more about turning your home equity into cash with a HELOC brokered by SoFi.

FAQ

How do renovation mortgages work?

Home renovation loans are known for combining the cost of financing a renovation or remodel with the cost of purchasing the home into a single-closing transaction. Lenders calculate the amount to be borrowed based on the value of the home after renovations are complete.

Can you include renovation costs in a mortgage?

A home loan can include renovations, but you must work with your lender to be approved for specific renovation loan programs.

Can you add renovation costs to your mortgage?

You cannot add renovation costs to an existing mortgage, but you can refinance your mortgage with a new “renovation mortgage.” However, you will need to choose a specialized home loan product. You can also apply for a renovation home loan when you make a new purchase.

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Photo credit: iStock/Hispanolistic

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.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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You can’t be lily-livered to want to build a houseboat, a self-propelled boat with a cabin. It will take a lot of time and more than a few doubloons.

Houseboat kits are a thing, and an alternative to building your own boat is buying a used houseboat and modifying it.

This piece will help you navigate how to build a houseboat and more.

First Off, Can You Build a Houseboat Yourself?

As long as you have the time and money, which can mean securing financing, yes, you can build your own houseboat.

Small houseboats may only have one or two rooms in their cabins, with people using them to fish or enjoy time on a river. Larger ones may be used somewhat like a summer home, with several rooms included. Houseboats of just about any size have a sort of porch on the ends, perhaps covered with awnings.

Although they have this in common with another type of house, the floating home, which is permanently moored, houseboats are designed for quick connection and disconnection with a marina’s electrical, water, and sewer services.

Typical Costs of Building a Houseboat

How much does it cost to build a houseboat? Well, as is the case with the cost to build a house, it depends. Costs will vary based on the size of the boat, the materials used, fixtures included, and so forth.

A small basic houseboat may cost from $2,000 to $5,000 to build, while a somewhat larger one can range from $10,000 to $35,000. (That said, there are luxury houseboats worth millions, so the sky’s the limit if the budget permits!)

How Long Will It Take to Build a Houseboat?

The time investment will depend on the size of the boat, the materials used, your level of building experience, how much help you have — and perhaps even the weather. One estimate suggests that building your own houseboat will take 600 hours.

Pros and Cons of Building a Houseboat from Scratch

Pros

•   When you build something yourself vs. finding a contractor, you can save on labor costs.

•   You can pick the design you’d like and, when possible, make customized choices.

•   You can benefit from the satisfaction of DIY.

Cons

•   This can be a big job.

•   If this is the first time you’ll build a houseboat, there can be a learning curve.

•   You’ll need to ensure that you have space to build, ideally near water.

How to Build a Houseboat

Steps include the following:

•   Find a spacious location to build

•   Request approval to build

•   Design your own houseboat

•   Build or buy a hull

•   Purchase materials

•   Start building

•   Install plumbing and electrical

Here’s more information about each step.

Find a Spacious Location to Build

Even a small houseboat can take space in which to build, so make sure you have enough room for the boat and for any workers.

Plus, consider how, once the boat is constructed, you’ll get it to the waterfront. Where do you plan to dock the houseboat? Is there sufficient building space near the dock to solve two problems at once?

Request Approval to Build

The U.S. Coast Guard’s Boating Safety Division provides information about relevant federal laws and regulations, Coast Guard directives, state boating laws, and more. Be sure to follow those while also checking in with your city and county government agencies to dot your local I’s and cross your T’s.

Design Your Houseboat

Determine the design. Check local associations, Google “houseboat plans,” and/or ask the owners of a houseboat what they recommend.

Plans are pretty affordable and can save you plenty of hassle, so pick the one that fits your budget and dovetails with your vision.

Build or Buy a Hull

The hull is the heart of the houseboat’s design and engineering ability. The quality and appropriateness of the hull determine how well it floats and how stable and durable the boat will be.

As you seek out building plans for the houseboat, examine what’s involved in building the hull and then make your decision from there. The hull may be a V-bottom, a flat bottom, multihull, or pontoon style, the most popular for a houseboat.

Pontoon boats can be spacious, which can provide a smooth, comfortable ride. They can be easy to maintain and can be a good choice for family use.

On the other hand, pontoon boats aren’t built for speed or easy maneuverability. They typically come with an outboard engine, and it can be hard to find another kind.

Purchase Materials

Just as you wouldn’t want to run out of egg whites when preparing a soufflé, you won’t want to run out of important building materials for your houseboat.

A personal loan could come in handy. You might be able to borrow up to $100,000.

Another possibility, for some homeowners, is a home equity line of credit (HELOC) or home equity loan. The interest rate will be lower than that of unsecured loans.

Make a list, check it twice, and then make sure you buy the right quality and quantity. Buying parts bit by bit can be more expensive, create more stress, and delay the project.

Start Building

This is what you’ve been waiting for, right? Now is the time to take the materials you’ve purchased and, by following the plans you’ve chosen, actually build your houseboat. Perhaps you’ll need to reach out for help, or maybe you’ve got this all by yourself. Either can work!

Install Plumbing and Electrical

With a houseboat, you can navigate the waters rather than being moored in place. Electrical wiring and plumbing will allow you to have access to electricity and use toilets. Waste will go into a holding tank that, when you get to a marina, can be removed by attaching your electrically powered pump to the marina’s system.

Are Houseboats Cheaper Than Houses?

Because houseboats range from a few thousand dollars to over $1 million, the answer is that some, but certainly not all of them, are cheaper than a house.

Expenses will continue to flow after the build. Most houseboat owners will pay mooring fees, liveaboard fees, insurance, and pump-out fees. But they may catch a tax break: A boat can be a main or second home, allowing owners the mortgage interest deduction if they itemize.

Can You Get a Houseboat Prefab Kit?

You can! It may make sense to explore those options to see if one fits your needs and budget — and compare that to the cost of building your houseboat from scratch.

Other Ways of Getting a Houseboat Other Than Building From Scratch

Here are two methods:

•   Buy an old houseboat and renovate it

•   Buy a new houseboat

Buy an Old Houseboat and Renovate It

You can save money by buying a used houseboat, especially if you have the know-how to make any necessary repairs and modify it. Or, depending on what needs to be done, you might still come out ahead financially if you buy an old houseboat and have an expert renovate the vessel.

Buy a New Houseboat

Just as when you buy a car, truck, or RV, when you buy new, you can benefit from the warranty and enjoy your new houseboat without worrying about what parts have worn down.

The Takeaway

How to build a houseboat? You could try building one from scratch or using a prefab kit, or you could buy a used houseboat and renovate it. What’s most important is choosing what fits your budget and enhances your lifestyle.
How to launch your houseboat plans? One way is with a SoFi Personal Loan of $5,000 to $100,000.

Another is a HELOC brokered by SoFi that has a lower interest rate than unsecured loans.

Access up to 95%, or $500,000, of your home equity to build or buy a houseboat.

FAQ

Can you live permanently on a houseboat?

Yes. Some marinas allow full-time liveaboards. Otherwise, check with your state’s anchoring regulations to see how long you can remain in a certain spot with the houseboat and what you’d be required to do.

Do houseboats retain their value?

Boats in general decrease in value, especially during the first couple of years and then gradually after that. That said, pontoon houseboats can last for decades. So when looking at what you’d invest and then dividing that cost by 30, 40, or even 50 years of potential use, you may consider this a good investment even without lots of resale value.

How long do houseboats last?

Pontoon boats are known to last so long that people use them their entire lives. The average lifespan is 30 to 40 years, with some lasting 50 years or longer.

Can you get a loan to finance a houseboat?

Although it may be challenging to find a loan program specifically for houseboats, you can contact banks, credit unions, and online lenders to see if their boat financing program includes houseboats. Or, if buying one, check with the dealer.

Other options include a HELOC, home equity loan, or personal loan to pay for your houseboat.

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Photo credit: iStock/Cucurudza

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.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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If you’re looking at lower-cost housing options, buying a manufactured home may have come up on your radar. Buying a new manufactured home or an existing one could be a good way to get into a home more quickly and at a lower cost than a site-built home.

Manufactured homes shed their mobile home and trailer rep in 1976. Since then, manufacturers have touted their quick turnaround times and high-quality materials.

If you’ve ever wondered how to buy a manufactured home, what financing options are available, and whether the titling of a home as real property or personal property makes a difference, read on.

What Is a Manufactured Home?

A manufactured home is built in a factory on a permanent steel chassis.

They often come in one, two, or three sections: single-, double-, or triple-wide. They must be able to fit on the highways, so the sections are limited to 16-foot widths in every state except Texas, which allows 2 extra feet.

Manufactured homes are not modular homes; nor are they considered mobile homes anymore. Manufactured homes are built entirely in a factory, whereas the components of a modular home are taken to the land and put together on-site. The two types of housing also follow different building codes.

Mobile homes are considered those built before June 15, 1976. After that date, manufactured homes were required to follow the HUD code, which covers manufactured home construction and safety standards. A manufactured home will have a “HUD tag,” a red metal certification label, on the exterior.

Why Should You Buy a Manufactured Home?

Manufactured homes are less expensive than site-built homes or modular homes, which must meet the same state and local building codes that stick-built homes do.

The average sale price of new manufactured homes nationwide was $86,500 for a single-wide and $158,800 for a double-wide as of August 2022, according to the Census Bureau’s Manufactured Housing Survey.

They have quicker build times than site-built homes, too.

Manufactured homes sold as part of a land package may hold their value much like a standard home, depending on upkeep and the local real estate market.

Speaking of land, if you’re a homebuyer and plan to lease the lot under you, beware of rising lot rents. Then again, if you’re looking for investment property, the ability to raise the lot rent could be a big draw.

Process of Buying a Manufactured Home

Buying a manufactured home is different from buying a site-built home. There are a lot of variables that you’ll need to know about.

Getting Financing for a Manufactured Home

Financing a manufactured home generally depends on whether the home will be attached to the land (real property) or consists of just the home (personal property, or chattel).

Financing Just the Home

It is possible to finance the manufactured home apart from the land. In this case, you’ll need to get a personal loan, a chattel mortgage, or dealer financing.

Another option is a government-insured home loan like an FHA Title I loan (which has loan limits) from an approved lender.

Financing the Home and Land

If you’re buying a manufactured home that’s permanently attached to a foundation on its own land, some lenders will finance the purchase with a conventional home loan.

An FHA Title I loan can also be used for just a developed lot or for a home-lot combo. FHA Title II loans are for buying a manufactured home and land whose price is above the Title I loan amount. Title II loans adhere to FHA loan limits, which are based on a percentage of the Federal Housing Finance Agency’s national conforming loan limits for conventional loans.

VA loans are available to eligible borrowers to buy a manufactured home that is permanently attached to the land.

And an option for low- to moderate-income buyers is a USDA loan if the home is in a USDA-eligible rural area.

Note: SoFi does not offer USDA loans at this time. However, SoFi does offer FHA, VA, and conventional loan options.

Recommended: What Is a Chattel Mortgage?

Searching for a Manufactured Home

In your search for a manufactured home, you’ll want to consider:

Manufacturer. Many companies build and sell manufactured homes. Keep your search broad at first, and ask friends and family for referrals. You may also want to keep a spreadsheet comparing the prices, incentives, and inclusions each company provides. Be mindful, however, that while some manufacturers are able to provide comprehensive services, the quality of their homes may be lower than that of another manufacturer who does not provide every service.

Model and layout. Tour models and figure out what you really need. Are there enough bedrooms? Do you prefer a separate kitchen and living room, or is an open layout more your style? Is there enough storage?

Customization. There are a lot of options when it comes to selecting custom design elements. Would you like patio doors? A fireplace? Separate vanities? The manufactured home builder will have a list of upgrades that you’re able to select from.

Exterior additions. When your home is placed, some exterior elements can make it feel like a site-built home. Porches, garages, and decks are a few examples.

Site. Do some research on what it takes to place a manufactured home on a lot. Do you want a lot in the country with a view? Are you able to pay for the cost to bring utilities to raw land? Would you prefer to lease land? Where you want to place your home will help you select the right one.

Buying Land for a Manufactured Home

Buying land comes in three forms:

•   Cash. You can buy land with any savings you have on hand.

•   Land loan. It is possible to finance land separately from your home, which is also the case with some tiny houses. You’ll have closing costs on both loans if you choose to finance separately.

•   Home and land. The easiest route is a manufactured home-and-land loan. Getting loan approval before searching for land or a manufactured home will allow you to see exactly how much you qualify for.

Site Prep

After buying land, it will need to be prepared for your manufactured home. This may include:

•   Soil condition tests

•   Making a plan for where the manufactured home is to sit

•   Clearing the area

•   Grading for proper drainage

•   Checking the holding capacity for ground anchors

•   Sewer or septic tank

•   Well or water connection

•   Driveway

Recommended: Typical Personal Loan Requirements

Delivery and Installation of Your Manufactured Home

After your land has been prepared and the home has been built, it can be transported to the site and installed. Your manufacturer will likely coordinate delivery and may be able to help you find contractors to install the manufactured home.

Getting Insurance

Homeowners insurance for manufactured homes usually covers the structure, personal belongings, and any other structures on the property. Some insurers require that a manufactured home be placed on a concrete or block foundation.

The coverage might also include liability insurance, which helps protect your finances if you’re responsible for damage or injury to someone else. A standard policy may not cover earthquakes or floods.

To figure out how much homeowners insurance you need, start by getting enough dwelling coverage to fully replace your home if it needed to be rebuilt. The replacement cost may be higher or lower than the home’s value.

Cost of a Manufactured Home

The cost of a manufactured home will vary by size, quality, customizations, and manufacturer. Not including the cost of acquiring and developing land, a new model may range from $86,500 to over $200,000.

There’s that mention of land again. As the Consumer Financial Protection Bureau says, “Manufactured housing is the largest source of unsubsidized affordable housing in the United States, but financing a manufactured home can be costly, especially for borrowers who do not own the underlying land.”

To ease the housing shortage, the Biden administration’s “Housing Supply Action Plan” aims to deploy new financing mechanisms for manufactured homes and accessory dwelling units (ADUs). The plan also prodded the Department of Transportation to modify its grant programs to favor cities that adopt zoning rules allowing dense housing and transit-oriented development.

The Takeaway

Buying a manufactured home is usually more affordable than a site-built or modular home, but it’s helpful to understand all the financing angles and the long-term stability that owning the land underneath you can bring.

3 Home Loan Tips

1. Traditionally, mortgage lenders like to see a 20% down payment. But some lenders, such as SoFi, allow mortgages with as little as 3% down for qualifying first-time homebuyers.
2. When building a house or buying a nontraditional home (such as a houseboat), you likely won’t be able to get a mortgage. One financing option to consider is a personal loan, which can be faster and easier to secure than a construction loan.
3. Thinking of using a mortgage broker? That person will try to help you save money by finding the best loan offers you are eligible for. But if you deal directly with a mortgage lender, you won’t have to pay a mortgage broker’s commission, which is usually based on the mortgage amount.

Worried about rising mortgage rates? With SoFi, you can lock in today’s rates for 90 days while you look for a new home.

FAQ

How long do most manufactured homes last?

Manufactured homes that are regularly maintained can last for 30 to 55 years, according to HUD.

How do I pay for a manufactured home?

Financing a manufactured home largely depends on whether the home is permanently attached to the land or not. A home that is not may be financed with a personal loan, one kind of FHA loan, a chattel mortgage, or a dealer loan.

How do I cut down on costs for a manufactured home?

The cost of a manufactured home itself could be relatively low. The biggest expenses you’ll likely encounter will be purchasing land and preparing it. If you can find a lot that already has utilities, it may help.

How is a converted shipping container classified?

Shipping containers that are converted into housing units can be accepted as manufactured homes if they are provided with a permanent chassis, are transported to the site on their own running gear, and otherwise comply with the HUD code for manufactured homes.

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Photo credit: iStock/Marje

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.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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