Mobile and manufactured homes are one of the most affordable ways to get into home ownership; unfortunately however, some lenders are hesitant to extend mortgage loans on mobile homes or manufactured housing. If you currently own either a mobile home or a manufactured home or are in the market to buy one. Some lenders have found this market too risky, while others don’t believe that they will make enough of a profit, as these mortgages are generally quite a bit lower than a mortgage on a traditional single family home.
This market reluctance to offer mortgage loans on mobile or manufactured homes has left some buyers with no option but to forgo a traditional mortgage loan and instead purchase their property via a personal property loan. The downside of personal property loans is that they almost always have much higher interest rates than mortgage loans, regardless of your credit history, and as such will cost you much more in the long run than a mortgage loan. If your credit is less than perfect, personal property loans may have higher interest rates double or even triple that of a mortgage loan. The average interest rate for personal loans can be as high as 10 or more%, where mortgage loans can be found for less than 4% interest.
If you currently own a mobile home that was purchased with either a higher interest mortgage loan or a high interest personal loan, you’ve probably wondered if you’ll ever have an opportunity to refi into a lower rate loan and save money each month. The good news is that it is possible to refinance a personal property loan into a lower interest mortgage loan, especially once you have built equity in your mobile or manufactured home or the land it sits on.
The Federal Housing Administration administers a program known as Title 1, which can help get mobile home owners into lower-interest mortgages. In order to qualify for most personal loan to mortgage loan programs, your mobile home must meet certain criteria and conditions: it must be your primary residence, it must be on a permanent foundation (and the foundation must meet the standards set by the Department of Housing and Urban Development), it must be titled as real estate and not as personal property and you the homeowner must own the land that the mobile home is located on or your home must be located on a rental site in a mobile home park that conforms to the Federal Housing administration’s guidelines. If your mobile home is not currently titled as real estate, a real estate attorney can help you to have it retitled as real estate (versus as personal property).