Mobile Home Refinance - Depending on how your mobile home was originally purchased, you may qualify for a mobile home refinance.
Typically, mobile homes are purchased with one of the three types of loans:
Chattel loan: If you rent the lot where your mobile home resides, you may have a chattel loan. Also known as retail installment contracts, these are the same type of loans that are used to purchase furniture. With chattel loans, mobile homes are considered personal property, not real estate. Typically, these loan rates are 2-5% APR higher than a traditional mortgage.
Personal property manufactured home loan: If you own the land where the mobile home will reside, you may have used the land as collateral to purchase the home. Like chattel loans, personal property loans have higher APRs than traditional mortgages.
Traditional mortgage: If you purchased the land and mobile home together, your lending institution may have financed your purchase as a traditional real estate mortgage with similar interest rates.
Of these three loan options, only the traditional mortgage is subject to a lower interest rate whenever the prime lending rate drops; chattel and personal property manufactured home loans are not affected by changes in prime.
To be considered for a mobile home refinancing loan, you must meet the following criteria:
A minimum FICO score of 620
No bankruptcies in the last 5 years
Tenure with your current employer for at least 2 years
If self-employed, 2 consecutive years of tax filings
At least 6 months of payment made on your existing loan
Not all lending institutions offer financing options for mobile homes, so plan on shopping around. Although it takes time, it will be worth your while to obtain rates and closing cost fees from at least 10 different lenders. Before taking the leap into a new loan, be sure that your refinance is a sound decision in synch with your personal financial goals.