Mobile homes are getting more and more popular nowadays. As people become more and more enchanted by the excitement and flexibility that a mobile home provides, these homes have sprung up like mushrooms in subdivisions and parks.
If one is considering to buy a mobile home and have it financed through a typical home mortgage, he should know already that it would be very possible to do that nowadays. Most banks and lenders would not give a regular mortgage plan for people who are intending to buy a mobile home. Financing these homes would usually fall under the usual personal property loan arrangements.
The rule of thumb that most lenders employ in lending to buyers of mobile homes is that mobility means higher rates. This means that “wheels” whether installed or taken off, will definitely shoot up the lending rates for mortgaging it. In a recent study that was done by Bankrate.com which surveyed around 20 big lending companies showed that seven of these companies were not even willing to give any kind of lending schemes to buyers of mobile and manufactured homes. However, there is some hope for the whole market of lending for mobile home buyers as more and more people are getting into this bandwagon.
Lenders usually ask for a higher interest rate for mobile home loans. This is because they would like to be assured that they get some leverage when lending to people who have few assets to be able to repay the said loan. It is a basic fact that people who are experiencing budget constraints are the ones who are purchasing mobile homes. Another factor that contributes to the higher rates for personal property loans is that all the administrative and transactional costs are passed to the borrower.
The limited number of lenders for mobile home buyers makes it much difficult for them to finance their home. The best strategy is to try to get a mortgage for the mobile home. One should do an extensive research before settling for a personal property loan. If one cannot get a mortgage arrangement for financing the mobile home, the best way to go is to have a good credit rating. One should also be aware of the different laws that affect mobile home owners. One example is the Homeowner Initiative of President Clinton (circa 1996) which gives incentives to mobile home owners.
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