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Mobile home loan – A less costly option to buy homes

Posted on: 28th Jun, 2005 04:53 am
If you're looking for a relatively less costly housing option than a traditional home, then one good choice available before you is the mobile or manufactured home. Mobile home, also called as trailer or caravan, is gradually becoming a popular housing option to many home buyers. Though a mobile home may look like a traditional home but it is comparatively little difficult to finance this type of home than to finance a traditional one. With little more effort, however, you can find out the required financing option too. If you want to know about mobile home loans, check out the following topics:

What are the types of mobile home loans?

Finding out the right mobile loan product can save a lot of money for you. Here is an outline of different financing options that may help you select the right product. These loan products are categorized on the basis of land ownership, lending authority and some other factors.

    On the basis of land ownership:


  • Personal property loan: If the manufactured property is not on a permanent foundation and if it is purchased separately, then you have to take out a personal property loan. When you own a land on your own, then personal property loans may be required to finance the purchase of a mobile home. In comparison to traditional home financing, the qualifying standards for personal property loans are relatively lenient.

  • Mobile home mortgage loan: If the manufactured property that you want to purchase is on a permanent foundation, then you have to take out a mobile home mortgage loan. These loans are relatively difficult to qualify than the personal property loans. These loans also require higher upfront costs than the personal property loans.

  • On the basis of lending authority:


  • Federal programs: Title I and Title II loans are offered by the lenders approved by the Federal Housing Administration (FHA), to buy mobile homes. To qualify for these FHA-approved loans, mobile homes must conform to the HUD Code and must be located on approved foundations.

    Manufactured home loans, guaranteed by the Department of Veteran's Affairs (VA), are available for for the veterans. This 100% VA financing is available if the mobile homes are located on approved foundations. The United States Department of Agriculture (USDA) also offers financing for the purchase of manufactured homes.

  • State and local housing agency programs: Mobile home loans are offered by the State Housing Finance Authorities/Housing Agencies to the first time home buyers at relatively lower rates.

  • On the basis of other factors:


  • Construction loans: These are short term loans designed to help you build a mobile home on property you have already purchased. Short term, high interest construction loans may also be available to help you make improvements on your home or property.

  • Home improvement loans: This type of loan is designed to help you make improvements to your mobile home. An example of this type of loan is a Title 1 Home Improvement loan insured by the FHA. Some states offer special loan programs in addition to the Federal government's tax deduction for certain energy efficient improvements.
  • In addition to the options stated above, there are also mobile home refinance and equity loans available from specific lenders. All you need to do is decide why you want to take out the loan and choose the one that is right for you.

What are the requirements to qualify for mobile home mortgages?

Usually mortgage loans are not offered for the purchase of manufactured homes which were built before 1976. This is so because the lenders take a close look at the condition of the house before offering a loan. A manufactured home must comply with the building standards proposed by Department of Housing and Urban Development (HUD). Here are the requirements to qualify for a manufactured home loan -

  1. The HUD Code requirements:
    • As per the HUD Code, the home must be built as 1/2/3 section homes at a protected place. Then the home has to be shifted to the site. Thereafter, the wheels and axles must be removed so as to give it a permanent foundation.
    • The home should follow the HUD Code pertaining to quality, design, transportability, durability, energy efficiency and fire resistance.
    • The manufactured home should pass the third party property inspections.
  2. Credit score:
    Mobile home lenders require a minimum credit score of 680 to offer a mobile home loan. With a credit score higher than that, you can get better rate.

  3. Ownership rights:
    • The mobile property that you are purchasing should be clear of any liens. The property under consideration may also be managed by a co-operative association.
  4. Down payment:
    • Depending upon several factors such as the type of loan, value of the home and your credit standing, you may be required to make down payment of 5-10% of the purchase price of the home.

What are the steps that you need to follow to obtain mobile home financing?

If you are planning to buy a mobile home, you need to follow some steps. Some of these steps are same as followed in the general home buying process, whereas some of the steps differ. Here are the steps that you need to follow:


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What tax benefits do mobile home loans offer?

If the loan is a mortgage, secured by the mobile home that is your primary residence, then the Federal government will allow you to deduct the interest and property taxes you pay from your income taxes, provided you have purchased the home before September of the tax year. In addition, some states allow you to deduct your property taxes from your state income taxes, provided the Federal timing requirement has been met.

Some states, like Indiana, may permit you to deduct all or part of the rent you pay for the lot your mobile home rests on. In order to determine whether your state will permit you to deduct the lot rent, you should consult a tax professional in your state.

Related Readings
Related References:
I want to refinance my mobile home loan to do improvements. I need a loan that does not require a permanent foundation.
Posted on: 27th Aug, 2005 12:18 pm
Hi RD TravisWelcome to MortgageFit forum.There are mortgage loans that are offered against mobile homes having no permanent foundation. You can apply for mobile home refinance home equity loans that will help you to conduct home improvements apart from refinancing your mobile home. Moreover, the interest charged on such loans is tax-deductible, so it will reduce the actual amount of taxes to be paid. Most lenders do not approve conforming loans for mobile homes without permanent foundation. You can therefore apply for non-conforming loans or jumbo loans that have higher limits than that offered by the government sponsored agencies - Freddie Mac and Fannie Mae. These government mobile home loans come up with slightly higher interest rates since there is greater risk involved in the process. Apart from these, there are the VA loans that are offered against such mobile homes but you should be a qualified veteran to avail such a loan. Moreover, the terms and conditions of home equity loans, VA loans as well as jumbo loans may vary from state to state. So if you let us know the name of the state where you are residing, it will be easier for us to provide you with some more information in this matter.Hope you have benefited from this information. Please feel free to post further queries. Also, sign up with us to avail free advice on related issues. Regards,Caron.
Posted on: 28th Aug, 2005 10:08 pm
Can i have a exact criteria which i need to look at while going for a mobile home refinance.
Posted on: 12th Sep, 2005 07:22 pm
Hi Telleta
Welcome to MortgageFit forum.
In order to avail a mobile home refinance loan, you need to qualify as a borrower and your mobile home should also qualify for the refinance. To qualify as a borrower, you should satisfy the following criteria.
  • A minimum credit score of 620.
  • Your credit history as well as employment history should be impressive.
  • You must not have filed bankruptcy since the past 5 years.
  • You should have made 3 months payments on the existing loan.
  • You must have 2 consecutive years of tax filings in case you are self-employed.

Your mobile home should also fulfill some criteria for the mobile home refinance loan.

  • The mobile home cannot be older than 1977.
  • It should be built according to HUD standards.
  • The loan amount should not be less than $20,000,00.
  • Your mobile home should have been built in 1990 or after, in case you want a cash-out refinance loan.
  • The home can be situated in a park on a leased land.
  • The size of the home should be about 768 square feet.

Apart from these criteria, there can be some others which vary from one lender to another. I would advice that you consult a suitable lender, provided you have already satisfied the above criteria. Also, refer to our section on Refinance before you apply for a loan against your mobile home.

Please feel free to send us your feedback.

Regards,
Caron.
Posted on: 12th Sep, 2005 08:22 pm
My credit score is 785. My husbands is 660. We have an income of 50,000 per yr. Our employment length at both our jobs is 9.5 yrs. approx. we have a home mortgage now that we intend to turn into rental property. We own a 1.5 acre piece of land with all the utilities newly put on. Land is free and clear. We want to buy a 2280 square ft. single wide. Is this possible? Never late on house payments in 10 yrs. by the way.
Posted on: 07th Oct, 2005 05:58 pm
Cool Tina, To me your credit score looks good and the best part is you have never late on house payments in 10yrs. A lot of people look for single wide mobile home loans for bad credit. But glad to know that you are not one of them.

I think you can get a loan with ease, all you need to do is go to any lender and surely you will get a loan with resonable interest rate.

Chill

Niicss
Posted on: 07th Oct, 2005 06:42 pm
Hi Tina

It feels great to hear that you and your husband have good credit scores. I also find that your employment history is appreciable. As Niicss has mentioned, with such good scores and income level you will definitely get mortgage loans for any kind of home that you wish to purchase.

Regarding your home mortgage, you can turn it into rental property but your mortgage note should state that option. Depending on your income and other expenses, you can make monthly payments on the home mortgage and also pay for another mortgage in case you take a second loan to buy the other property.

In case you think of reducing your monthly payments on the home mortgage consider refinancing that loan, but check out if you can get a lower rate. Otherwise you will not benefit from refinancing. Moreover refinance your loan when you are still living in the present home. This is because it costs more to refinance in case of an investment property rather than a primary residence.

Hope you will benefited from the information.

Best wishes for your new home. May God help you.

Thanks,
Samantha.
Posted on: 07th Oct, 2005 11:33 pm
my credit is damaged i need a simple mobile loan quickly
Posted on: 19th Oct, 2005 05:06 pm
Hi Leslie,

Welcome to MortgageFit Forums.

Don't get disheartened even if your credit has been damaged severely. There are alternative options to get a loan.

Just try to check that your credit doesn't fall back more. We do have a good network of lenders who can help you to overcome this situation. One of them will contact you, analyze your problems and suggest you the best option which you can afford.

God bless you.

Thanks,
Samantha
Posted on: 19th Oct, 2005 05:20 pm
I currently own my 1997 single-wide mobile home. The home sits on a family owned piece of property--which I DO NOT own. I am needing a loan to pay off some of my high intrest loans. Is there something out there for me? My credit is POOR. Please HELP!
Posted on: 25th Oct, 2005 11:52 am
Hi Nana,

Welcome to MortgageFit Forums.

I understand your problem. It is difficult to get a loan at convenient rate with poor credit. Some banks that offer mobile home loans charge a very high interest rates on the consumers with poor credit records. The main goal will be to look for banks that do mobile home loans with no down payment.

But, don't lose hope. There are different types of mobile home loans available to fit your situation. You can try out government mobile home loans also. Only thing, you have to check which one is convenient to you. Also, I would suggest you as a friend, to try and improve your credit gradually as that can sort out your loan problem considerably.

We do have a wide range of lenders who are sincere and efficient to help people in difficult situations as yours. Kindly sign up with us at free of cost. We shall forward your query to an appropriate lender who will call and discuss with you to suggest the best possible way out.

Feel free to ask if you have further doubts.

God bless you.

For MortgageFit,
Samantha
Posted on: 25th Oct, 2005 12:20 pm
My husband and I went through a bankruptcy filed last year, discharged in February /05. We make $70,000 plus a year and our credit scores are only around 450 right now. When we bought our home, we paid about 8% down, but we bought our 10 acres to put it on, drilled a well and have done a lot of improvements including a pool, horse paddock and dog kennel. Homes of less quality with less extras are selling in the neighborhood of $110,000. We reaffirmed our debt and owe approx. $76,000. We would like to refinance with a $20,000 cash out or get a home equity loan for $20,000 to pay for a needed surgery. I have been at my job for 3 years and in the same line of work for 12 years. We currently have an adjustable rate mortgage currently around 10% interest and a 30 year note. We'd like to possibly get a better rate and a shorter loan term but aren't sure if this is possible after bankruptcy. Does it matter that we reaffirmed our debt. We have been 30 days late or less several times over the life of the loan but are current on our payments.
Posted on: 10th Nov, 2005 05:10 am
Hi, can i ask that which bankruptcy did you filed. Is it under chapter 7 or charter 13.

Niicss
Posted on: 10th Nov, 2005 06:51 am
Getting a loan thats too with favourable rate is tough after bankruptcy. You have also mentioned that you have been late few times in making your loan payment, again that will going to effect the your credibility when you will go for a loan.

There are many lenders in the industry who offer loans to the borrower with poor credit. Chances of getting a loan with fair rate looks tough but not impossible.

All the best
Posted on: 10th Nov, 2005 07:06 am
What adonis is not wrong but no need to worry a lot as there are many lenders who offer loans to the borrowers with poor credit on the basis of present scenerio.

If you can present yourself to be worthy enough for the loan repayment then i dont find any reason that why you cannot get a healthy rate. But make sure before approaching to any company do your homework by getting ready with all the documents to support your statements.

Niicss
Posted on: 10th Nov, 2005 07:12 am
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