If you own a manufactured home and would like to take advantage of lower interest rates, then refinancing your manufactured home may be the solution. Obtaining a manufactured home refinance can reduce your monthly interest rate which will save you thousands over the life of your mortgage loan. Homeowners can also consolidate debt by using the refinance to pay off high interest credit cards, car loans, and short installment loans.
Mobile homes are used interchangeably with manufactured homes. However, the major difference is that mobile homes were built prior to 1976, and manufactured homes were built after 1976 when HUD initiated a higher standard of building. Purchasing a manufactured home can be an affordable solution to owning your own property. Whether it is a chattel loan which is the home only or personal property, or a home/land loan which is real estate property and what manufactured homes are, then refinancing your manufactured home can be a great investment.
Refinancing a Mobile Home
In order to qualify for a mobile home refinance, the home must be on permanent foundation and follow the guidelines set by the Department of Housing and Urban Development. The title of the manufactured home must be under real estate and not personal property. And most importantly, the homeowner must own the land that the manufactured home is placed upon.
Chattel loans are higher risk loans because they are considered moveable, personal property. These chattel loans are usually the only option for borrowers with poor credit and whose mobile homes are not on permanent foundation. Conversely, manufactured homes on a permanent foundation would be considered real property and offer a lower interest rate.
Benefits of Refinancing Manufactured Home
Because older manufactured home loans can carry higher interest rates, balloon payments, or adjustable rates, refinancing your mobile home loan can save you money in the long run. If you are looking for a short term fixed rate, then your interest rate will be lower. However, if you are looking for a longer term loan such as a 20 or 30-year loan, then a higher interest rate will be given. Also, depending on your credit score, the higher your credit score, the lower the interest rate. Overall, borrowers can take advantage of the many benefits of refinancing a manufactured home such as fixed interest rates for the entire life of the loan. With lower rates and high loan-to-value ratios as high as 95 percent, a mobile home refinance enables the borrower to find a loan with as little as 5 percent equity.