The equity of the home is the difference between the market value of the home and the remaining balance on the mortgage. The equity on a mobile home can be used to get a loan, but the funds are generally less readily available than other types of home loans. However, with perseverance, you can find a lending institution willing to help, as long as you and your mobile home meet the minimal requirements. Mobile home equity loans are also known for having higher interest rates, but you'll be able to receive all the money at once and use it however you choose, once you're approved.
Determine your eligibility. To qualify for a mobile home equity loan, you must own a mobile home on which you've taken out a mortgage. The borrower must be 18 years old or older, have a good credit rating, a verifiable source of income and enough money to make a down payment of at least 5 percent of the loan amount.
Determine if the structure is eligible. Mobile home equity loans are only available if the structure was manufactured after 1977, adheres to the HUD codes, and has full utilities including water, sanitation and electricity. The home must be well-maintained, have a permanent foundation, and it should be used as the borrower's primary residence.
Find a lender, once you're satisfied that the eligibility requirements are met. Get quotes from at least four different lenders, so you can compare and get the best rate. Contact local lenders, but also use online financial lenders which may offer better rates or a chance for comparison shopping. The more quotes you get, the better chance you'll have of getting a good deal on your mobile home equity loan.
Enlist the help of a broker to help negotiate terms with your chosen lender, if possible. Read the loan agreement carefully and have a lawyer inspect it to make sure it's in your best interest to accept the terms. Once you've agreed to the terms of a mobile home equity loan, you must adhere to them until the agreement is done.
Tips & Warnings
- Mobile home equity loans allow you to choose your repayment option, interest rates and time frame. Be sure to take your future plans into consideration and choose terms that will work for you over time.
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