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Frequently asked Questions about Manufactured / Modular Homes
Q: What does the term “Manufactured Home” mean?
Q: What’s the difference between a Modular Home and a Mobile Home?
Q: Why should I buy a Manufactured Home instead of a Site-Built Home?
Q: Why should I buy a Mobile Home instead of Renting?
- Q: What does the term “Manufactured Home” mean?
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A: A “Manufactured Home” includes both Modular Homes and Mobile Homes.
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- Q: What’s the difference between a Modular Home and a Mobile Home?
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A: Modular Homes are residential homes built to Canadian Standards Association A-277 (Canadian National Building Code).
Standard specs include engineered floor trusses, 2 x 6 exterior walls, 8' ceilings and primed and painted drywall.
Modular homes with truss floors are typically designed to go on a basement or foundation.
Mobile Homes are manufactured to Canadian Standards Association Z-240.
Standard specs include 2 x 8 floor joists on a steel frame, 2 x 6 exterior walls, 7½' ceilings, and gypsum paneling.
Mobile Homes on a steel frame are typically set on concrete blocking piers or sono tubes (cement pylons).
All mobile homes can be upgraded to A277 Code.
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- Q: Why should I buy a Manufactured Home instead of a Site-Built Home?
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A: Manufactured Homes are more cost-effective (25% – 30% lower) than site built homes.
Purchase price is fixed — no overruns.
Manufactured Homes are quality built in a factory, finished and ready to move into approximately 2 months from order date.
Many plans to choose from, CSA approved homes, full warranty, most dealers provide all inclusive packages that assist you with the financing and set up of your manufactured home.
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- Q: Why should I buy a Mobile Home instead of Renting?
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A: Why buy a house or condo for your landlord — and end up with nothing — when you could buy a mobile home, your very own small house — and end up owning a very substantial asset?
What Can I Afford?
The rent you pay — today — could be your mortgage payment, towards owning your own small house — tomorrow.
| If Your Monthly Rent Is |
The Same Amount Monthly
Would Fund A Mortgage Of |
| This example is based upon an interest rate of 5% — amortized over 25 years, and including an average pad rental of $300 per month. |
| $ 900 |
$105,000 |
| $1,000 |
$120,000 |
| $1,200 |
$155,000 |
The Best Part
Now that the Harmonized tax is in effect, there is a tax rebate based on the initial price of the home — purchaser must live in home for a minimum of 6 months.
And since it is leased land, you do not pay taxes on the land — only if home is located in a modular home park.
You do however pay a small annual provincial property tax on the house only, which on an average house is approximately $450 per year (after your government grant, on your personal residence only).
For people over the age of 65, you only pay $200 per year.
And closing costs for a sale are around $1,000 — for lawyer, house insurance and adjustments.
Financing It All
The bank will allow 32% of your gross income to go towards your monthly house payments and your debt ratio cannot exceed 40% of your monthly income.
- Example:
- Yearly gross income = $36,000
- Monthly gross income = $3,000
- 40% of $3,000 = $1,200
- 32% of $3,000 = $960
In the above example you can afford to pay $960 per month for your home — which consists of your mortgage, pad rent, home insurance and heating costs.
You will qualify for an approximate $105,000 mortgage.
Financing it all: You can purchase your home with a minimum of a 5% down payment.
With a small down payment the mortgage will require to have CMHC insurance.
Qualifications needed to show the bank are the last 2 years of your T4 slips.
If you have less than 1 year at your present job, you will need either a co-signer or a guarantor, sometimes both — depending upon your situation.
The maximum mortgage amount which the lender will allow you to take is determined by the maximum sum you are able to pay each month.
The Bottom Line?
The money you pay for rent is gone forever and you will have absolutely nothing to show for it.
This money could pay for your own mobile home — your very own small house — which will eventually amount to a very substantial asset.
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