How to Finance or Mortgage Used Mobile Homes

Truly mobile homes cannot be mortgaged.

Mobile homes, often called manufactured homes, are considered real estate in a few instances. Usually, for a home lender to place a mortgage on a mobile home, the manufactured home must be characterized as a permanent residence. This means that the property has some sort of foundation. In order to verify this, you will likely need to get an inspection conducted on the home. However, once you establish the permanency of the unit, you will be able to place a mortgage on that home.

Instructions

1. Contact a real estate inspector to conduct an appraisal of the mobile home. If you already have an inspection or an appraisal confirming the permanency of the home, you need not hire another inspector unless the appraisal was conducted more than a year ago.

2. Calculate the value of the home (using the appraisal) versus the amount you need to borrow. The maximum loan-to-value ratio on mortgages for mobile homes is 85 percent, according to Housing and Urban Development guidelines. This means that, for example, on a mobile home worth $75,000, the maximum loan can only be $63,750.

3. Pull your credit report from annualcreditreport.com, and pay an additional fee for your FICO score, if available. This is a number between 300 and 850 that represents your total creditworthiness. Scores over 720 are excellent, while scores below 600 are poor. Determine any other negative marks on your credit (judgments, charge-offs, delinquencies), and attempt to clear these up prior to securing credit.

4. Contact several home loan lenders in your area. Use your FICO score as a guide. Banks may not lend to customers with mobile homes, so you may need to use a finance company or a mortgage broker. Obtain several financing offers from at least three companies.

5. Review these offers carefully. Look closely at the fees for origination and closing. In addition, pay attention to the rates offered and the types of rates offered (adjustable, variable, fixed). Choose the mobile home financing offer than best meets your financial situation.

References

• Housing and Urban Development: Manufactured Homes: Eligibility
• Housing and Urban Development: Financing Manufactured Homes
• Bankrate: Mortgages: Financing a Manufactured Home

Resources

• Annual Credit Report: Home
• Housing and Urban Development: Manufactured Homes: Eligibility