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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 am renting to own a 1997 clayton doubblewide. asking 23,000 thats pay off of the loan and her a little money. I also am looking at a pieace of land for 5,000 I have bad credit my friend has no credit we need 30,000 we have no down payment but can pay 600 a mo.
Posted on: 06th Jan, 2009 12:23 pm
Hi,

To Maggie,

If you are planning to purchase a mobile home which is situated on a rental land, then the lenders will not be ready to give you a loan. Moreover are your planning to take a mortgage on the mobile home or do you want to go for a personal property loan? I think in case of a personal property loan, you will not have to pre-qualify but you will definitely have to fulfill some other terms and conditions.

Hi angelahatton,

With a bad credit and no down-payment it will be difficult for you to get a loan. You can check out requirements for getting a mobile home loan from the given link:
http://www.mortgagefit.com/mobile-homeloan.html

Thanks.
Posted on: 07th Jan, 2009 02:53 am
I have never bought anything on credit so I have no credit history. I want to get a new mobile home. How can I do that
Posted on: 08th Jan, 2009 05:06 am
Hey chasejacob,

Credit history is not formed on the basis of what you bought on credit. It is a record of how an individual has paid back all his debts both secured and unsecured debts in time, whether the debtor has filed for a bankruptcy, foreclosure, deed in lieu etc. It is a record of credit accounts that you have as well as the total amount of credit you have taken in the past. To know more about credit history, check out:
http://www.mortgagefit.com/credit-history.html

If you want to get a new mobile home, you should have a credit history. Apart from this, the mobile home which you are buying should have a permanent attachment to the land. To know more about mobile home loans, check out the given link:
http://www.mortgagefit.com/mobile-homeloan.html
Posted on: 08th Jan, 2009 11:46 pm
husband's name only is on the manufactured home loan...had for 7 years. He is currently gravely ill and on hospice. How do I get my name on the loan and what would happen if he died and my name is not on the loan ? thanks
Posted on: 10th Jan, 2009 11:20 am
hi caol girl

you can refinance the loan in your name. this will help you to add your name to the mortgage. if your name is not on the mortgage and in such a situation your husband dies, then the lender can ask you to refinance the loan.

thanks.
Posted on: 13th Jan, 2009 01:37 am
What lenders do these Title 1 home only loans for manufactured housing?
Posted on: 14th Jan, 2009 07:24 am
Hey Stephen,

You can contact FHA approved lenders who will be able to help you with a title 1 loan. You can also speak to the lenders of this community and seek a no obligation free mortgage consultation. Let's hope they can help you in this matter
Posted on: 14th Jan, 2009 10:54 pm
What is the formula to find out how much you can borrow,and the amount of time you have to pay back?
Posted on: 17th Jan, 2009 10:17 am
My nephew is buying a mobile home, which is already in an established mobile home park, per landcontract & verbal interaction. Now it is time to get serious & find a respectable loan company. Please assist us with this mission
Posted on: 18th Jan, 2009 06:28 pm
nephew needs a loan to purchase our mobile home from us. He has been living in it for 2 years. Bea Black
Posted on: 18th Jan, 2009 06:33 pm
Hi Bea Black,

Is the mobile home located on a rental land? If it's so, then the lenders will not be ready to give your nephew a mobile home loan. In that case, your nephew will have to take a personal property loan. To know more about mobile home loans, check out the following link:
http://www.mortgagefit.com/mobile-homeloan.html
Posted on: 18th Jan, 2009 11:18 pm
I own my 2000 mobile home I paid cash for it and I need to borrow money about 2500. dollars and I want to borrow it against my title of my mobile home. Is there any suggestions for me?
Posted on: 23rd Jan, 2009 10:53 am
Hi Kim,

You can borrow it against the title of your mobile home. But as it is not a huge amount, it will be better if you can get a personal loan for yourself. However, a personal loan will come at a higher rate of interest.

Thanks
Posted on: 25th Jan, 2009 10:40 pm
i have 1 acre of family land in texas me and my wife are trying to find a lender to purchase a mobile homeour credit scores are border line do you know where we can go to get approved with a loan we have went to a manufacturer and keep getting the run around
Posted on: 26th Jan, 2009 10:43 am
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