Many Canadians are looking toward affordable home options, and one of these options is mobile homes. But what exactly is a mobile home? How do you finance one? And is it a good investment? Let’s get to the bottom of whether this property type is the right choice for you.
What is a Mobile Home?
A mobile or manufactured home is a single home or dwelling built and designed to be transported to a new location on the back of a flatbed truck. They are created with factory settings and often follow relatively simple designs.
This type of home can be very tasteful, with plenty of upgrade options available as you would have in a traditionally built home.
One pro of this property type is affordability. A second? They are backed by Canada Mortgage and Housing Corporation (CMHC) home insurance. CMHC insurance protects lenders from a homeowner potentially defaulting on their mortgage loans.
Remember that a mobile home is not the same as a modular home. While also built in a factory setting, a modular home is a permanent home designed to stay in one place and not move like a mobile home.
What Do Mobile Homes Cost?
These smaller homes are significantly less expensive than traditionally built homes. Part of this is due to the construction process. Since you build this type of home using factory settings, the materials can often cost less as suppliers typically purchase them in bulk. That said, pricing very much depends on the design. After all, you can still get granite countertops and extensive add-ons like a porch which will increase the cost.
Additionally, since these homes are free to move, remember that the price only includes the building itself — not the property. This means you also need to rent or purchase the property or land you choose at the cost of building your home. This price can also vary drastically depending on the location and the amenities (waste, recycling, snow removal, sewer utilities etc.) if you rent.
The median sale price of a mobile home in 2021 varies based on the city you live. For example, this type of property in Vancouver could cost you $327,000, whereas it is closer to $160,000 in Ottawa. While these prices have nearly doubled from 2017, they are still significantly less expensive than a traditionally built home.
How to Secure a Mortgage for a Mobile Home
As we now know, mobile homes are recognized by CMHC. However, getting a traditional mortgage for one is not necessarily easy. The easiest way to qualify for a conventional mortgage is if you also purchase the land on which the home will stay.
Suppose you are renting rather than purchasing the property. In that case, you can look into a chattel mortgage that can remain active even if you move your home to another location since it ties the loan to personal property. Remember, these types of mortgages often come with higher interest rates than traditional ones.
You can also look for an unsecured personal loan which doesn’t require you to use the home as collateral. However, many lenders limit the borrowing amount to a maximum of $50,000, which likely isn’t enough to finance your purchase in full.
A final option is to finance your mobile home with the manufacturer. Most manufacturers offer in-house financing, and the process is much easier, while the best rates may not be available.
How Much Does it Cost to Move a Mobile Home?
One of the big questions about mobile homes is how much does it cost to move them? There are several factors built into this, including:
- The size of your home
- The distance
- The province in which you are moving
- The material of your home
- Condition of your home
- Any extras (basement, porch etc.)
- And more
Price estimates range up to $5,000 for a move under 100km. If you are moving further, prices can increase by over $20,000.
Are Mobile Homes a Good Investment?
Some will say they aren’t because mobile homes still have a stigma and lose rather than gain value. Others will point out that the drastic price difference between a mobile home and a traditional home makes home affordability a better option and allows owners to pay off existing debt and start investing.
Ultimately, it comes down to whether or not this property type is the best decision for you based on your circumstances. There are a lot of pros and cons, so take the time to consider and compare to decide if this is a suitable choice for you and your family.
Pros
- An affordable option for a home
- Customizable
- Built-in controlled environments and built-to-set standards
- Flexible- you can move your home with you
Cons
- Negative stigma
- Depreciate faster than traditional homes
- Requires land purchase or rental on top of the home
- Financing can be difficult
Ultimately, the best home is the one that provides you with stability and joy and is within your budget. Mobile homes can be just as good of an investment as a traditional property if you maintain the asset and watch the real estate market.
