Loans For Mobile Homes | Mortgage

by GrahamMcKenzie

Mobile homes are also under the category of residential homes. So it falls under one of the variety of real estates. So the financial institutions which provide loans for homes can also provide loans for mobile homes. But the loans for mobile homes are slightly different in requirements when compared to fixed home loans.

To get security and insurance over the property, the financial institution which provides loans require the mobile homes to be fixed on the concrete floor by removing axles, wheels, hitches which are primary axes of the mobile homes. This is needed for the financial institution to secure them by means of property being fixed to one place not moving around.

Financial institution offers two types of loans to mobile homes. They are loans for only the home alone and home along land where it is installed. When the loan is for home alone, then the loan will bear all the cost of building material but which does not include transportation cost and other taxes. But usually people take loans only for their mobile homes.

Unfortunately, the very nature of being mobile makes mobile home loans a bit of a risk for lenders. Banks like to know that the property they are funding will stay where expected, and mobile homes have the ability to move anytime. This uncertainty has lead to many lenders to no longer carry mobile home loans which are not inclusive of the land on which the home will sit.

When we tried to get a loan for mobile homes along with the land, it was much easier when compared to getting loan just for mobile homes. The loan amount is higher but it does not provide for taxes as the loans for home alone.

HUD code of construction and credit rating of the borrower are the two important check points while sanctioning the mobile home loans. If the mobile homes does not qualify and meet HUD code of construction, loans are not given. If the credit rating of a borrower is very low, then also loans are not sanctioned by financial institutions.

Financial institution usually sanctions 75 to 90 percent of the total cost of the building the house for mobile homes. It is a long term mortgage which is normally above 10 years.

DISCLAIMER: This article is provided as information only and is not to be taken as financial advice.

Graham McKenzie is the content coordinator for a leading South African leading Homeloans and Bond Origination portal which provides access to ABSA Homeloans.