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Is It Easy To Finance a Mobile Home?
Every mortgage company I have contacted says they do not finance mobile homes. Many lenders told me that buying a mobile home is not buying real estate even though I am planning on making my forever dream home. What am I hearing. I thought it was easy to finance a mobile home. Other people I talked to on a different community assistance forum said that it is very easy to finance a mobile home. Can anyone at Great Content Authority Forums know if it is easy to finance a mobile home. Can you please explain why a mobile home is not real estate? If a mobile home is not real estate, what is it then?
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9 Replies
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Financing a mobile home can vary in difficulty depending on several factors including your credit history, the age and condition of the mobile home, its location, and whether you own the land it’s situated on. Here are some points to consider:
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Credit Score: Just like with any other loan, having a good credit score can make it easier to secure financing for a mobile home. Lenders typically look for a credit score of 620 or higher, but some may accept lower scores.
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Age and Condition of the Home: Older mobile homes may be more difficult to finance, especially if they don’t meet certain standards set by lenders or if they require significant repairs or renovations.
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Location: Some lenders may have restrictions on financing mobile homes located in certain areas, especially if they’re in rural or remote locations.
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Land Ownership: If you own the land the mobile home will be placed on, it can potentially make financing easier. However, if you’re renting a lot in a mobile home park, lenders may view it as higher risk.
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Type of Loan: There are different types of loans available for mobile homes, including chattel loans (which are specifically for mobile homes not on permanent foundations) and traditional mortgage loans (for mobile homes on permanent foundations). Chattel loans often have higher interest rates and shorter loan terms compared to traditional mortgage loans.
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Down Payment: A larger down payment can improve your chances of securing financing and may also result in better loan terms.
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Lender Options: Not all lenders offer financing for mobile homes, so it’s important to shop around and find a lender who specializes in mobile home loans.
Overall, while it’s possible to finance a mobile home, it may require more effort and research compared to financing a traditional house. Working with a lender who has experience in mobile home financing can help streamline the process and increase your chances of approval.
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I think the direct answer is it can be considered chattel or personnel property until it is affixed to a permanent foundation (then it can be considered real estate but there is paperwork involved) also some states only allow it to be moved only once. Hope that helps.
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Yes, that is correct. Chattel units is property only and the land is not owned by the unit owner. We can definitely do financing on Chattel units but require higher down payment. Down payment assistance is available for modular and manufacturered homes fixed to a permanent foundation.
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There’s difference between mobile homes and modular or manufactured homes. You normally cannot finance mobile homes because mobile homes are not considered real estate. Mobile homes have wheels and can be transported elsewhere. Manufactured homes are home sections manufactured elsewhere and have wheels to be trailered to there final destination. Once delivered the wheels come off and fixed to a slab where it can be tied down or fixed to a permanent foundation. Modular homes are manufactured elsewhere in sections or panels. The panels and parts are transported to the final destination where it is assembled there. Manufactured and mobile homes are considered riskier investments for lenders and investors, therefore loan-level pricing adjustment applies. Homeowner insurance is higher and so are the rates. Many lenders have overlays on manufactured and modular homes such as higher rates, higher credit scores, verification of rent, reserves, lower debt-to-income ratios, and may not finance single wide mobile version and only double wide with at least 1,000 square feet. Ask our preferred insurance agent @Brent about homeowners insurance premiums of manufactured and modular homes versus stick built homes. The last manufactured home I financed for a homebuyer had the lowest homeowners insurance premium of $2,500 on a manufactured home but has gotten quotes as high as $4,700 per year versus a stick built homeowner insurance premiums of $800 per year.
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Mobile homes have different insurance requirements compared to standard homes. They need the HUD or serial number, the year, make, and model for replacement cost. Standard homes don’t have these requirements as they are built on-site. Manufactured homes, however, are built in manufacturing plants or warehouses and need a permanent foundation or to be tied down when placed on land. Failure to do so might affect their eligibility with standard market carriers, and you may need to look at surplus lines or carriers that are not in the standard market that are on commercials. It is essential to shop around for insurance premiums for mobile, manufactured, or modular homes because it all comes down to location. Claims history can also affect rates. If your home is in an area prone to hail, storms, or dangerous weather conditions, insurance premiums can be costly.
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I thought this might be interesting to all – I was touring a facility a few months back. We have probably purchased 4 this month for our community in Oklahoma. And yes we are always looking for better ways for financing.
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Also In our subdivision we have quite a few people that made them their forever homes. Here are a few pictures we had. I wished I had the picture of the back decks but these had concrete landing and all of them will put in carports in the future.
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Some of these manufactured homes are nicer than stick built homes.
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There’s a lot resistance when it comes to manufactured home financing. But there are many modular and manufactured financing wholesale mortgage investors.