Can I Get a Mortgage For Manufactured or Mobile Homes?
Manufactured homes offer a number of advantages for consumers. The primary advantage is that manufactured homes are less expensive than traditional homes. However, getting a mortgage loan for a manufactured home may be difficult. There are a number of factors that will determine whether or not a borrower can get a mortgage for a manufactured home. Buyers should carefully consider financing options before buying a manufactured home.
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Foundation Style
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One of the most important aspects of a manufactured home in regards to financing is the type of foundation used. Lenders prefer to write mortgages for homes placed on a solid foundation such as a concrete slab. Other types of foundations, such as metal stands, can allow a home to shift during high winds or settle into the ground. Both may cause significant damage to the home, thereby reducing the home's value and the lender's collateral. Lenders also prefer homes located on owned instead of rented land.
Credit Score
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A buyer's credit score will impact the ability to acquire a mortgage for a manufactured home. Before shopping for a manufactured home, buyers should request a copy of their credit report from one or more reporting agency to review it for accuracy. There are three major credit reporting agencies: Trans Union, Experian and Equifax. Buyers should follow the procedure of the reporting agency to have any problems corrected. Buyers can take additional steps to improve their ability to borrow by paying bills on time, reducing outstanding debts and increasing their income level.
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Government Insured Loans
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Both the U.S. Department of Housing and Urban Development (HUD) and the Veteran's Administration (VA) insure loans for manufactured homes. Borrowers that are eligible for HUD or VA loans can receive lower interest rates due to the government backing. Each program has requirements that the home and borrower must meet before loan approval. Borrows can contact HUD or the VA for more information. The lender can also help the borrower to determine eligibility for these loan products.
Lenders
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Most banks and credit unions offer mortgage loans for manufactured homes that meet their standards. Requirements will vary from lender to lender, so buyers should contact a number of financial institutions to determine eligibility. The alternative to a mortgage loan is a personal property loan. Most manufactured home financing is with this style of loan, but there are drawbacks. Personal property loans typically are for shorter periods of time and have a higher interest rate than a mortgage loan. Both of these will result in a larger monthly payment.
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References
- Photo Credit Camping â€" Mobilhome image by albillottet from Fotolia.com
