Various Types of Manufactured Home Mortgages

While there used to be a stigma attached to owners of manufactured homes (previously called mobile homes or trailers) in today’s market these homes often look better than brick and mortar homes.

However, the one that doesn’t change is they still have the ability to be “mobile” which creates problems when a buyer is attempting to locate financing. This also means buyers of manufactured homes will pay higher interest rates than buyers of conventional homes because it is so easy for a buyer to leave with the home.

The most common type of manufactured home loan is the personal property loan. The best rates are for those customers who actually own the property on which the home sets. These buyers will be the ones to whom lenders will offer the best rates because the permanency of these homes will allows those buyers to also receive the tax credit on the loan’s interest.

Unfortunately this scenario covers less than one buyer in six, so the majority of manufactured home buyers must pay the higher interest rates along with additional fees and down payment requirements that are based upon the credit of the buyer, the age of the home and its condition. Some states also require buyers to pay an annual vehicle licensing fee.

Retail financing covers four out of five buyers of manufactured homes, and these retailers generate approximate 82.6 percent of those loans. Approximately a third of all the manufactured homes are sold to buyers who choose locations in manufactured home parks, courts or subdivisions.

These buyers usually only purchase the manufactured home and not the land on which it is located. While you can certainly obtain financing through the manufactured home dealership, you can also find financing on your own and possibly at a better rate.

It can be difficult to find financing for a manufactured home that is not permanently affixed to the land on which it is located, but it is not impossible. If you’re planning to purchase a manufactured home to place on a rental lot, you need to take the extra time to locate the lender who is willing to offer you the best financing package.