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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 wanted this double wide....it would have been a person to person thing, so we went to the bank to see if we could get the loan to buy it. Getting the loan was no problem, but the bank said that before they would give us the money the double wide had to be moved and set up........the people wouldn't go for that and of course I wouldn't either....is there something else that can be done!!!!! :(
Posted on: 21st Oct, 2008 09:05 pm
Hi

You can go for personal property mobile home loans if your dealer or the retailer does not offer you a mortgage on the double wide. I think the retailer will agree on this and will be ready to give you a loan.

Check out more on personal property mobile home loans before you apply for it.

Thanks.
Posted on: 22nd Oct, 2008 12:30 am
I have a Mobile Home in a Mobile Home Park in Bishop, CA, and it is not on a permanent foundation. The home is paid for, built in 1979, 2,256 sq ft. and is in very good condition. I am 70 years old and have excellent credit score. I am searching for a Reverse Mortgage Lender. Can you help me?
Posted on: 22nd Oct, 2008 11:18 am
My husband credit is in the low 495,But income for the year is 95,000 to 119,000.Can we still get an home at 50,000
Posted on: 22nd Oct, 2008 11:33 am
Hi!

To Addy:

You will only get a reverse mortgage if the mobile home has a permanent foundation. If you could arrange for a permanent foundation of the house, then you can easily get a reverse mortgage. Otherwise, the lenders won't agree to give you a loan.

To Mondays:

I don't think it will be easier for you to get a loan with such a low credit score. However, you can look for bad credit home loans. To know more about this, visit the given link:
http://www.mortgagefit.com/mobile-homeloan.html

Thanks,

Jerry
Posted on: 23rd Oct, 2008 01:47 am
I would like to purchase a mobile home on land but my debt to ratio is high. What options do I have?
Posted on: 23rd Oct, 2008 09:30 am
Hi wondering!

You have said that your debt to income ratio is high. But may I know how much is it? As far as I know, lenders can give loans to people who have a DTI of 36%. However, they will check your income, liabilities, credit score and others. They will also check if the mobile home has a permanent foundation or not. I have also heard that some lenders agree to give mobile home loans to people with as high as 43% DTI.

But I would suggest you to consult some of the lenders. This community has a large number of lenders. You may go for a no obligation free mortgage consultation from them.

Thanks.
Posted on: 24th Oct, 2008 02:40 am
I am looking into purchasing a 1986 Doublewide on Permanent Foundation with .62 Acre and a 3 car garage in Delaware. Could anyone direct me to whom they think might be a good company to finance this?
Posted on: 27th Oct, 2008 04:44 pm
Hi there again. Please disregard my last post as I was unregistered and typed in a hurry. I recently got approved for a mobile home set up in a park. Looked at the home and seen that it was not in my best interest to go forth on it. I been in the market for the last several years in buying a home for the wife, kids and I. The home I am deeply interested in which is not far from me lists at $57900. It is a 1986 Doublewide on Permanent brick foundation. It had a huge addition of a sun room and also has a 3 car unattached garage with .63 Acres.

This is well within my price range. Other homes around here that have land lists for $100k more. It needs some cosmetic work but nothing major. I am looking into who and what my best finance options are. My credit is ok, not sure of the exact score. I have been in my present job now for 4.6 years and in the same line of work for 13. I hold a salary position of $55k yr. Could someone shoot me in the right direction on this? Any and all help will be appreciated. Thanks in adance!!!

Marvin
Posted on: 27th Oct, 2008 05:34 pm
Hi Marvin!

As far as your employment and credit is concerned, you are in a good position to get a loan. However, credit score also plays a major role in getting a good mortgage.

This community has a large number of lenders who will be able to give you a proper idea about the mortgages. I think you should go for a no obligation free mortgage consultation with them.

Thanks.
Posted on: 28th Oct, 2008 02:07 am
I have been reading up on the Title 1 Loans. Are these loans available to anyone? If so, how do you apply? The home I am looking into needs some work. Drywall needs replaced in alot of places, etc.. Really looks like someone vandalized it or the previous owner was holding WWF tournaments or something. Even though, it is nothing I could really worry about. I can do alot of the home repairs myself. Only problem is I dont know if it would deter any lenders from giving me a loan based on it's condition.

The land it sits on would probably be worth $40k more alone without the house. Once again I am uncertain. I don't exactly have alot of extra money floating around here. I am the only one working and with todays high cost of living it seems as if I am in a losing battle trying to get mysel a home other than in a park. Hence the reason I am interested in the Title 1 loan. Could someone with a bit more experence give me some insight on whether this achievable? Could this home qualify for Title 1? My location is in Lincoln, DE. 19960 if that helps. Thanks again all.
Posted on: 28th Oct, 2008 04:38 pm
Hi mreeves!

Yes, you can go for a Title 1 loan. With the help of this loan, you will be able to go for home improvement. One of the best examples of this is the Title I Home Improvement loan insured by FHA.

Thanks,

Jerry
Posted on: 29th Oct, 2008 02:52 am
interested in purchasing a mobile home on rented land,in salisbury mass from a sister who is selling and need to get a mortgage.sister is gifting the downpayment
Posted on: 29th Oct, 2008 07:57 am
Welcome Martha Rheaume.

As far as I know, you cannot get a mortgage on your mobile home because it's put up on a rented land. Of course you can try for personal property mobile home loans from your dealer or retailer.

Thanks.
Posted on: 30th Oct, 2008 12:57 am
would like too try to get a loan on my mobile home. I do own it but everybody we talk to says we have to have a mortgage on it so how do I go about getting a loan on a 2001 mobile home that I already own.
Posted on: 03rd Nov, 2008 08:09 pm
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