If you own a mobile home (also called a manufactured home), or are in the market to buy one, you might already have found that it can be difficult to find lenders who will extend mortgage loans on mobile homes, which is unfortunate as buying a mobile home can be one of the most affordable ways to get into home ownership.
Some mobile home buyers will 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 credit history. If your credit is less than perfect, personal property loans will most certainly have higher interest rates than mortgage loans – however, for many people interested in purchasing mobile homes, personal property loans may be their only option. The average interest rate for personal loans can be as high as 12% - which mortgage loans can be found for less than 4% interest.
Once you’ve owned your mobile home for a bit and built up (or built back up) your credit score, many homeowners become interested in ways to reduce either the interest rate on their loan, or their monthly mortgage payment or both. It is possible to refinance a personal property loan into a lower interest mortgage loan.
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 be your primary residence, must be on a permanent foundation (and the foundation must meet the standards set by the Department of Housing and Urban Development), must be titled as real estate and not as personal property and the homeowner (you) must own the land that the mobile home is located on. There are some exceptions to this last requirement, as long as your home is located on a rental site in a mobile home park that conforms to the Federal Housing administration’s strict guidelines.
If your mobile home is not titled as real estate, you can apply to have it retitled as such. A real estate attorney can help you with what’s known as title conversion. In order to convert your title to a real estate title, you’ll need to be able to provide the real estate attorney with the deed to the land where the home is located as well as a certificate of title or a copy of the mobile home’s certificate or origin.
Although it can cost you out of pocket to convert a title, or to build a permanent foundation in order to qualify for some mobile home refinancing programs, you may still save money in the long run with a lower interest rate mortgage loan. Contact a local lender today to learn more about what programs are available to you, and to go over the specific facts of your mobile home and financial situation to determine if refinancing your mobile home loan makes sense.