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Chattel
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Land/Home
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Description: |
A Chattel loan is where the bank finances the home by itself. |
A Land/Home finance includes the land with the home in the loan. |
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Advantages: |
Short processing time
Home is not tied to land
Almost no closing costsFewer conditions required |
Lower interest rate
Lower down payment
Improvements can be included in loan
Equity in land can be used as down payment
Taxes and insurance included in payment |
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Disadvantages: |
No land improvement can be included
Higher interest rate
No escrow account for taxes and insurance
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Longer processing time (average of 3 months)
Land is permanently tied to home for life of loan
Closing costs included
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Associated Costs: |
Title Fee1 year hazard insurance |
Appraisal
Land survey
The lender's attorney *
Land title search *
Title insurance *
Escrow *Origination points *
* These costs are typically included in the loan |
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Steps Involved: |
- Purchase Agreement
- Application
- Loan Approval
- Documentation and Verification
- Closing
- Home Installation
- Phone Audit
- Move In
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- Purchase Agreement
- Loan Application
- Credit Approval
- Documentation, Verification and Final Underwriting
- Appraisal, Title, and Land Survey
- Closing At title Company
- Site Improvements and Home Construction Begin
- Home Installed on Site
- All Construction Completed
- Final Inspection
- Move In
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Additional Notes: |
Some people do Chattel loans to get the home placed sooner and then refinance the land and home together to lower their interest rate. |
Land/Home financing is sometimes easier to qualify for because the bank has equity in the land and the home. |
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