Mobile Home Loan Advice

Should I refinance my Mobile Home Loan or just let them have it? My interest rate is 17%.

Should I refinance my Mobile Home Loan or just let them have it. My interest rate is 17%. I have a double-wide mobile home, year 1998. We have been in it since 2002. We have been late several times on the loan but are now current. Our interest rate is 17%. The purchase price was $41,000. Our pay off balance is still over $40,000. My payment each month is $714. We average paying over $7,000 in interest each year. We tried to refinance with company, but the new rate was only .5% less than the current rate. I felt this was a slap in the face. I want to get out of this loan but I don't know what to do. Should I let them foreclose, try to short sell, or what. Because I do not want to continue to pay for something that I will never be able to pay off.  With the amount of money I am paying, I could be making a payment on a real house. Please help.

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Bill's Answer
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That is an outrageously high loan rate, and you are paying almost all interest on this loan. I think that you should take some aggressive action to solve this problem, or this mobile home loan will keep burning a hole in your pocket. Your options are basically to try to refinance the mobile home loan, or sell the double-wide or just let them foreclose or short-sale it back to them.

First, you should certainly contact lenders to find out what refinance options are available to you based on your current financial situation. The only way to determine whether or not you will qualify for a refinance loan is to apply for a loan with several different lenders and/or brokers. Unfortunately, it is very difficult to get approved for mobile home loans given the state of the credit markets, but I suggest applying and seeing what happens.

Bills.com makes it easy to compare mortgage offers and different loan types. Please visit the Bills.com loan page to find a loan that meets your needs.

Not only will these mortgage professionals be able to tell you whether or not your currently qualify, but if you do not qualify, they can tell you what aspects of your financial situation might cause you problems, and make suggestions about how to improve your chances to qualify for a loan.

If you would like to read more about mortgage refinance loans, I encourage you to visit the Bills.com Home Refinance Resources.

Here are a potential lender's two main considerations:

First, your credit history is a major consideration when you are shopping for a new mortgage. A favorable credit score will increase your chances of finding a loan that will lower your monthly payments, since you will qualify for better interest rates than those available to people with credit problems. Currently, the average interest rate for a new 30 year fixed-rate loan is 6.3%, and the average FICO credit score is 723. So, if your credit score is better than 720, you should expect to qualify for an interest rate of around 6.3%, or possibly lower. However, if you have had credit problems in the past, you could be forced to pay a significantly higher interest rate, which could make your monthly payments much higher. For example, the monthly payment on a $100,000 30 year mortgage at 6.5% is approximately $630, plus insurance, taxes, etc. If the interest rate on the loan increases to 9.5%, the monthly payment increases to $840, an increase of over $200 per month. As you can see, your credit score, which is one of the major determinants of your interest rate, is extremely important when shopping for a new mortgage.

Second, the amount of equity in your home, and the length of time you have been paying on your current mortgage will also be major considerations, since you are looking to pull money out of the home and lower your monthly payments. To lower your payments, you must either obtain a loan with a lower interest rate than your current mortgage, find a mortgage with a longer repayment term, or borrow less than the original balance of your current mortgage. For example, if you have $60,000 left to pay on a $100,000 mortgage, you could cash out $40,000 in equity and keep the same monthly payment as the old loan, assuming the interest rate and loan term remain the same. However, if the balance of your new mortgage will be more than that of your old mortgage, you must either find a lower interest rate or take a loan with a longer repayment term, if you want to keep your monthly payments the same.

As I mentioned before, you need to shop around with different lenders and brokers to find the loan that best suits your needs. I encourage you to start your search by visiting the Bills.com Home Refinance Resources where you will find a wealth of information about home refinance programs.

If you cannot refi your mobile home loan, I think it is prudent to see if you could rent something similar for a lower cost and then evaluate a short-sale or allowing them to foreclose on your double wide.

I wish you the best of luck. I hope that the information I have provided helps you Find. Learn. Save.

Best,

Bill

Bills.com

4 Comments

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  • KW
    Apr, 2010
    kelsey
    Getting a mortgage for a mobile home is basically the same as getting a mortgage for a regular house. You will need to find a good mortgage loan provider to help you through the process and get you the money you need. Choosing a mortgage provider can be tricky. While you can certainly go to your local bank or credit union, you may not want to. The rates offered by banks and credit unions might be substantially higher than those offered by other loan companies. You will be able to find lenders that specialize in mobile home mortgages who can provide you much better terms, but u have to be aware of the changing Rates.
    0 Votes

  • 35x35
    Feb, 2009
    Ed
    Very few lenders and/or loan officers are aware of the information I am about to share with you concerning obtaining an FHA, VA, or HUD Guaranteed Loan for a Manufactured Home. In fact, I have mortgage brokers, lenders, loan officers, real estate agents, and even the home owners, calling my office for advice on how to expedite these types of loans for their manufactured home. I'm surprised that many of these professionals don't know one of the most important components to getting their loan approved. I am not a loan officer, or a mortgage broker, or a real estate agent - I am an engineer. So why would these professionals be asking an engineer about a critical aspect in getting their FHA/HUD, or VA loan approved for their manufactured home loan? Because for every FHA/HUD, VA, and other HUD guaranteed loans for manufactured homes, an Engineer Foundation Certification is required for each and every manufactured home receiving a federally guaranteed loan. Most lenders are surprised at such a requirement and I end up explaining the process to them during the course of our professional relationship. It's quite amusing some times. So what is an Engineer's Foundation Certification? It is a document from a professional licensed engineer where the home resides, that certifies that the manufactured home rests on a permanent foundation. Not just any permanent foundation, but a permanent foundation complying with the HUD Permanent Foundation Guide for Manufactured Homes (PFGMH - HUD 7584). Most lenders are not aware of this document, and sad to say, most engineers also. Most engineers are not familiar with the HUD guidelines for a permanent foundation on a manufactured home - so when seeking out an engineer, make sure you get one with plenty of experience. Otherwise, the loan that you're trying to expedite will get tremendously delayed. And we all know that time is money! The engineer certifying the home needs to be extremely confident and familiar with the HUD PFGMH code/manual as mentioned above. It is the Manufactured Home Foundation Bible, so to speak. This manual is not an easy read, even for many engineers. The manual is vague and requires a sound understanding of how manufactured homes work, and a fine understanding of building analysis in general. Manufactured homes do not follow the same building codes as in-place stick built homes - this is why most engineers are not familiar with the codes (they simply don't have the time or want to expend the effort in learning yet another code book.) If you're a mortgage lender, loan officer, manufactured home builder, real estate agent, or the like, you need to team up with an engineer that has a reputation of providing clear judgment concerning manufactured home foundations. If you don't, the delay could be very costly. If you do hire the right engineer who has experience in manufactured home foundations that are HUD compliant, and the keyword here is HUD compliant, then the loan process will be very smooth and expeditious.
    0 Votes

  • BA
    Dec, 2008
    Bill
    That will depend on the kind of loan you are looking for, and you will have to get quotes directly from the lender. Also, read this page for information on financing mobile homes.
    0 Votes

  • BB
    Dec, 2008
    Britni
    What is the current average interest rate on a mobile home loan?
    0 Votes