Mobile Home Loan

By: EconomyWatch Content   Date: 14 December 2009

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Mobile homes are factory-made housing structures which are installed at any desired location. In developed nations, a mobile home is one of the crucial solutions that help the problems caused by the housing crisis. This has mainly arisen due to high population density in prime cities. They are also used as temporary housing at construction sites or permanent rehabilitation for low-income groups in rural areas. However, financing a mobile home is a daunting task. Only specialized financial institutions offer mobile home loans to potential borrowers.

Mobile Home Loan: Types

An individual can seek mobile home loan either as a personal property loan or a mortgage. Personal property loans are available for mobile homes that are located at any rented lot like mobile home parks. They are offered by retailers who sell mobile home structures. Although, personal property loans attract higher interest rates, one can easily qualify for such loans even with a high debt-to-income ratio.

 

Only mobile homes with a permanent foundation are eligible for mortgage loans. An individual can purchase the loan to cover the cost of both the land and the mobile home or either of them.

 

The following comprise a range of finance schemes available for mobile home mortgage loans, such as:

 

Federal schemes: The Federal Housing Administration (FHA) offers Title I loans for purchasing and renovation of mobile homes. These loans are available through FHA-approved lenders for a maximum period of 25 years. However, only first time buyers can qualify for FHA-approved loans.

 

State schemes: The State housing development authorities also have specific programs for first time mobile home buyers. Individuals who want low interest rate mortgage loans can contact local administration authorities for detailed information.

 

Private lenders: Banks, private lending institutions, brokers, specialized mortgage companies and credit unions offer a range of financing options for mobile home purchase and refinance. One can purchase fixed rate, adjustable rate, hybrid adjustable rate and buy down loans from private lenders.

 

Mobile Home Loan: Eligibility

 

Mobile home loan eligibility conditions vary among different lenders. Here is a list of some common eligibility conditions:

 

  • Mobile home design must adhere to guidelines laid down by the US Department of Housing and Urban Development (HUD).
  • Moderate credit score.
  • Five to 10% as down payment for a newly built mobile home.

 

Specialized institutions offer mobile home finance schemes for veterans and government officials. Veterans can also purchase FHA-approved mobile home loans.


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