Mobile Home Refinance Options

Mobile Home Refinance Options
Bills.com TeamSep 13, 2007
Key Takeaways:
  • Financing a mobile home mortgage is more expensive than a permanent home.
  • Seek an FHA-backed mobile home loan or refinance.
  • Finding a lender for a mobile home loan is difficult. Many lenders that offered this kind of loan exited the market.

How to Refinance a Mobile Home.

Generally speaking, traditional mortgage lenders are reluctant to offer mobile home refinance loans because, unlike homes built on permanent foundations, which tend to gain value over time, mobile homes tend to lose value, or depreciate, as time passes. Refinance lenders take a security interest in a home in which they lend money, in case the borrower defaults on the payments, allowing the lender to foreclose on the home.

During a foreclosure, a lender will sell the home to recoup as much of their money as possible. because mobile homes tend to depreciate, it is more difficult for lenders to get their money back in a foreclosure. For example, if a bank lends $50,000 on mobile home based on its current value, and the borrower defaults 10 years later, the lender may only be able to sell the property for $10,000, meaning the lender may lose money in the process.

For an introduction to pre-screened mortgage lenders, the bills.com mortgage refinance saving center makes it easy to compare mortgage offers and different loan types.

Specialty Lenders

Specialty lenders allow borrowers to refinance their mobile homes. keep in mind that loans on mobile homes are not the same as standard mortgage loans. rather, they are generally referred to as personal property loans, and carry higher interest rates and shorter loan terms than regular mortgages.

If you are interested in obtaining a refinance loan for a mobile home, look for a specialty lender who offers mobile home refinancing, and also see the FHA financing manufactured (mobile) homes page.

Again, you will probably pay a higher interest rate on a mobile home refinance loan than a standard home loan, so refinancing your mobile home may not be a sound financial decision. make sure the interest rate offered to refinance your home will not cause you financial hardship.

It takes extra effort to find a lender that makes loans on a mobile home. A large number of lenders that used to make this kind of loan stopped doing so after the mortgage meltdown in 2008.

Get up to 5 competing mortgage quotes

8 Comments

BBill, Jan, 2010
Lenders want three things in a borrower: 1) Positive credit history, 2) Stable income, 3) Debt-to-income ratio of 35% or less. Get a Uniform Residential Loan Application (Form 1003) and complete it to see where you stand. Complete one copy of the form for yourself alone and complete another copy including information from both you and your partner. Then start shopping at the Bills.com mortgage refinance savings center and get no-cost quotes from pre-screened lenders. Refinancing a mobile home is more difficult than for a stick-built home, but it is possible if you are persistent.
LLorraine Zeller, Jan, 2010
I live in Florida and trying to find some direction for refinancing. We have doublewide mobile home on 25 acres of land. Also have adjacent property with home and 10 acres. Me and my significant other own both properties. He lives in one and I live in the other. I need advice on the direction to go for refinance and debt consolidation. Credit is good.
BBill, Oct, 2009
If you own the land, you can get an FHA loan. If not, your refinancing options are much more limited, but possible.
HHoward Steele, Oct, 2009
I have a 24x66 1973 gentry mobile home, all copper wiring set on a permanentfoundation with with a 14x40 addition and a permanent conv pitched roof, and Inspected and accepted by the county Building inspectors. I an eligible for a va loan and am trying to refinance. Any suggestions??
BBill, Feb, 2008
You do not have to wait to apply for a second mortgage, but my concern would be to find the right lender. YOu are inquiring about a second mortgage, which makes me assume that you already have primary mortgage that you pay on. I would contact them to see what your options could be. As far as whether this is a good decision, my answer would be no. You only borrow against your home to make improvements on your home, remember that you are putting your home on the line for the sake of these small bills. I would think twice before I did so.
SSherry, Feb, 2008
We have a singlewide and are going to be buying a modular home to go on our land. We have several small bills and are not sure which is our best bet to pay off the small bills which could take several years or by our modular and get a second mort. and pay off all of the bill. How soon can a second mort. be taken out on a new home and do you think this would be a good idea?
BBill, Oct, 2007
Most banks won't finance mobile homes, the major reason for this is that the current default or foreclosure rate for mobile homes is far in excess for that of stick built homes or single family residences. Land finance is a highly specialized field. To do it right, requires a detailed knowledge of how these transactions work. You can still refinance but your options are limited as follows:1. Lower your rate and payment: Yes. Credit must be at least good to excellent. Minimum credit scores = 620. Full income documentation. 2. Cash Out / Home Equity Loans: Not allowed for single wide homes. 3. Debt Consolidation / Pay off Bills: Not allowed for single wide homes.Try a small local bank who will know the land values and local market.
JJeffrey Best, Oct, 2007
I have an older singlewide mobile on about five acres. The mobile does not have much value and no mortgage company will touch me but the land is valued at about 125k by the county. Is there any way to refinance using the land value?