Should You Buy a Manufactured Home With Cash?

Paying cash for a home sounds like a dream, and with manufactured homes it's more within reach than with most site-built houses. But paying cash isn't automatically the best move. Here's what to weigh before you decide. Vision Homes, a manufactured and modular home dealer in Fayetteville, NC, wrote this for local buyers.

What counts as "cash"?

To a dealer, a cash deal means the full price is paid without a home loan from a lender we work with. That money might come from:

• Savings
• The sale of another home or property
• An inheritance or settlement
• Retirement funds
• A loan you arrange yourself, such as a home equity line or a personal loan from your bank or credit union

If you're borrowing the money yourself, it's still a loan, so compare its rate and term with a regular manufactured home loan before you decide.

The upsides

• No interest. You won't pay thousands of dollars in interest over 15 to 30 years.
• No monthly loan payment. Your monthly costs are just lot rent if any, taxes, insurance and utilities.
• A faster, simpler purchase. No loan application, underwriting or lender conditions.
• You own it outright from day one.
• No lender rules on things like the home's age or setup.

The downsides

• Less money in the bank. Putting most of your savings into a home can leave you short in an emergency.
• The cost of the whole project. The home is only part of it. Site prep, foundation, utilities, well and septic, permits, skirting, steps and decks add up. Make sure your cash covers all of it.
• Other uses for the money. Money tied up in a home can't be invested, used to pay off higher-interest debt or kept for the future.
• No lender double-checks. Lenders require things like appraisals and inspections. Without a loan, it's up to you to make sure everything is done right.

Your cash purchase options

• Pay in full at the time of the order and closing.
• Pay part cash and finance the rest. A larger down payment can mean a smaller loan, a lower rate and a lower payment, while keeping some cash on hand.
• Pay cash now and refinance later, if you want to free up money after you're settled. Ask a lender whether this is possible for your setup before you count on it.

A note for cash buyers

Before you commit, ask us for a complete price that includes the home and all of the site work for your property. Keep a cushion for surprises and for the first year of insurance and taxes. And keep your paperwork, such as your bill of sale, title or deed, and warranty documents, somewhere safe.

Not sure whether cash or financing makes more sense for you? Call Vision Homes at (910) 323-8222 and we'll run the numbers both ways. See all of our financing options →