It’s important to know the differences in property types because it makes an impact on your loan type and type of home owner’s insurance you need. Let’s review them now.
Single Family Home
This is the most common type of property. This property has one family that owns the property and does not have common dwelling spaces as other residents. There are no walls being shared and there should be land separating one property from your neighbor.
Condo and Townhouse (PUD)
A condo is a type of property has individual ownership with multiple tenants that share common areas such as mailbox, pool, or recreation room. A townhouse is a single-family dwelling that shares walls with other identical single-family dwellings that also have access to common areas. As a living condition they are different but loan and insurance wise they are treated the same way.
Manufactured Homes (Mobile Home)
Mobile homes or trailer homes are built upon non-removable steel on a piece of land but can technically be moved to another location. Most of the land mobile homes are built on is leased land which is why some lenders will not fund these types of loans but others will.
Is a property that has the owner on one side or section of the home and a tenant or tenants in the other sections or side of the home. This is considered an investment property which changes the loan type, interest rate, and possibly down payment.
This is any home that is not the owner’s primary residence. This can be an investment property, vacation home, rental property, or any other reason that the owner does not use the home as a full-time residence. This will change the loan type, interest rate, and possibly the down payment.
As you can see, it is vital that you explain to your lender why you are purchasing this property and WHAT you are using the home for. For legal reasons you must tell the truth on this one. If you have any questions about buying a home or want to get pre-qualified to buy a home, please reach out to us here at The Ben Lemon Team at 801-507-2700. We would LOVE to work with you!