How to Refinance a Mobile Home With Land
When interest rates fall, you can save a significant amount of money by refinancing your existing mortgage loan into a new one with a lower interest rate. If you have a 30-year fixed-rate mortgage loan of $165,000 with a 7 percent interest rate on your mobile home and land, you can save more than $200 each month by refinancing to the same loan but with a new interest rate of 5 percent. You'll need a high credit score, high income level and low amount of debt to do this.
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Things You'll Need
- Copy of your mortgage loan statement
- Copies of the paperwork that proves your gross monthly income: last two paychecks, two most recent federal income tax statements, checking and savings account statements
- Copies of the paperwork that proves your monthly debt levels: recent credit-card statements and most recent student, car or other loan statements
Instructions
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1
Compile the documents you'll need to prove your gross monthly income and debt levels. For debt, include your most recent credit-card statements--showing how much you owe and the size of your minimum required monthly payment--and student, car or other loan statements. For income, include your two most recent paychecks and two most recent federal income tax returns.
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2
Contact a mortgage lender. You don't have to work with your existing lender or bank. Tell a loan officer at the company that you are interested in refinancing the mortgage loan covering your mobile home and the land on which it sits.
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3
Allow the lender to run a credit check on you and any co-borrower. This will give them your credit score, a three-digit number designed to show lenders quickly how responsible you've been in the past with your money. If you've missed several payments or skipped them entirely in your past, your credit score will reflect this. Generally, lenders consider borrowers with credit scores under 620 to be risks. They may not approve such borrowers for a refinance. If they do, they'll charge them higher interest rates.
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4
Permit your lender to have your mobile home and land appraised. The lender needs this done so it can determine how much equity you have in your property. Different lenders require different amounts of equity when considering refinance requests.
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5
Make copies of the financial paperwork you gathered in Step 1. Send this to your lender. Your lender will then determine if your income level is high enough, and your debts low enough, to qualify you for a mortgage refinance. Most lenders prefer that your monthly debt, complete with your new mortgage payment, be less than 36 percent of your gross monthly income.
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6
Sign the closing papers to make your refinance official if your lender approves your request. If your lender rejects your request, you can always try again with a different lender. Know, though, that you'll probably have to pay--about $400 or so--for a new appraisal every time you re-start the refinance process.
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Tips & Warnings
Refinances aren't free. Most lenders charge about $4,000 to $5,000, depending on the size of your loan. Make sure your refinance will lower your mortgage payment by enough dollars each month to make the move financially worthwhile.
