How To Refinance Mobile Homes - The Basics

If you are the ‘outdoors’ type of person, you can indulge in your passion for a mobile home with a mobile home loan, even if you have no funds. Such loans are available even if you have a poor credit rating. People who wish to make improvements in their mobile homes can approach those who refinance mobile homes with mobile home refinance home equity loans. 

Mobile Home Financing

A home is probably one of the most important assets you will ever buy in your life. A mobile home gives you an opportunity to move around. Constructed on an integral framework, mobile homes are built as per the standards set by the United States Department of Housing and Urban Development. 

Mobile homes are often financed by personal property loans, or consumer installment loans – the latter easily available compared to mortgage loans. Let us look at some of the features of a mobile home loan you are opting for:

• The mobile home loan lender sets the limit of your credit rating. 
• One condition of these loans requires the property to be your principal residence. 
• Mostly installment loans, these mobile home loans apply to the structure and not the land occupied by your mobile home. 
• As compared to mortgage loans, these loans offer higher down payments, shorter terms and higher interest rates. 
• The interest rate depends on your credit score and the kind of home you intend to purchase. 
• Depending on the mobile installment loans, some lenders may accept land in lieu of down payments. In such a case, you do not make a cash down payment, but the lender holds a mortgage on your land. 
• These loans are expensive, yet easier to obtain. These mobile home loans are ideal for low-income buyers or those with poor credit report.
• Interest paid is not tax-deductible as these loans are not conventional mortgages.

Mobile Home Refinancing

Refinancing mobile homes is a process by which you pay off your current loan with another loan, using the same property as collateral. Through refinancing, you go for debt consolidation that reduces your monthly installments, allowing you to pay off your debts at the earliest possible time. Through refinancing your mobile home, you pay a lower rate of interest as compared to other loans. 

To be eligible for refinancing mobile homes you need to meet the credit standards as lay down by the lender. In addition, the property must be your principal residence. Refinancing your mobile home involves the following costs:

• Application fees for checking your credit report.
• Fee for processing your loan request.
• Lender’s attorney’s review fees.
• Appraisal fee for estimating the value of your property.
• Loan origination fee.
• A pre-payment penalty.
• Other miscellaneous fees, is any.

Benefits of Refinancing Mobile Home

Let us see the benefits of refinancing mobile homes.

•  By refinancing at the present interest rate, you can increase your savings, provided it is 2% lower than the rate at the time of closing your existing mobile home loan. 
• To enable you to know about your monthly payments till the day of repayment of the loan, with refinancing you can transfer an adjustable rate loan to a fixed rate loan. 
• Through refinancing of your mobile home loan, you can get a lower cap, in case you have an adjustable mobile home loan with a higher cap.
• In case you need additional money apart from your mobile home loan, refinancing can provide you with additional amount for repairing or purchasing.

You can avail of a mobile home mortgage loan for your mobile home even if it does not have a permanent foundation. Most lenders may not approve of conforming loans in such cases, but you can avail of non-conforming loans or jumbo loans. These non-conforming loans have higher limits than that offered by the government-sponsored agencies, such as Freddie Mac and Fannie Mae. Due to the risk involved in the process, you have to pay a slightly higher rate of interest. 

Other mobile home loans are the Veteran’s Affair (VA) loans, but you need to be a qualified veteran to qualify for such a loan. You need to check all the terms and conditions of these mobile home equity loans, VA loans, as well as jumbo loans, as they vary from state to state. 

To learn more about how to refinance mobile homes, or to know more about a mobile home loan, or a mobile home mortgage, many online sites offer such information.

 

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