Qualifications for Mobile Home Loans

Mobile home loans can be more difficult to qualify for than standard mortgages. Historically, the lending industry has treated mobile homes like vehicles. This means they are often serviced by personal loans rather than mortgages. However, since personal loans have higher rates than most mortgages, it is best to explore traditional options for your mobile home loan. You will face unique requirements in order to obtain the loan.

Portability Concerns

One issue that faces mobile home loan applicants is the portability of the home. A lender secures home loans with the property itself. If the borrower defaults, the lender seizes the asset to recover the money. This is typically easy to do because the home cannot be moved; a lender knows where to go in the case of foreclosure. Unfortunately that is not the case with mobile homes. If a borrower can simply pick up and move the asset used as collateral. To overcome this concern, consider purchasing a manufactured home that is not mobile. If the home is secured by power lines and water lines, you will find a lender more willing to extend a traditional home loan.

Valuation and Appreciation

Another challenge facing mobile home borrowers is the question of the property's value. When a mortgage lender extends a loan, it sends in an inspector to value the asset. The inspector must make sure the home is a good investment. It can be very hard to value a mobile home. The location can change, so location is taken out of the equation. Further, while homes tend to go up in value, mobile vehicles tend to depreciate. This can result in a situation where the asset is worth only a fraction of its original cost if the bank must seize it in the future. You can counter these problems by securing your home to a high value lot. This will increase your chance of obtaining a home loan for the manufactured home.

Safety and Security

A final concern with mobile home loans comes from their security issues. Mobile homes can be exposed to both theft and natural disaster. Mobile homes are often located in close proximity to other homes. Mobile home parks may even house transients from time to time. If the location is not secure against theft, the home's value may constantly be in question.

Insuring the home is costly, and home owners may default on their loans if their assets are stolen in a break-in. Securing your home on a gated lot with a security guard will help. Mobile homes are exposed to high risk. Without basements and pipes going into the ground, the structure is unstable. In a tornado or hurricane, the entire structure can be easily destroyed. To protect against this, it is best to live outside of natural disaster zones. By locating your home in a safe area, you will find lenders are more likely to work with you.

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