Getting a loan is always a tricky pursuit, and this is especially true for both mobile and manufactured homes, which are harder to come by. These types of homes are constructed off-site from the lots they are to be placed in. The cost of building these homes is much lower than traditional homes built on the lots themselves.
How Manufactured Home Loans Work
“Mobile homes” are structures that were built before 1976, which is when the US Department of Housing and Urban Development introduced a new set of rules to make them safer. Similar construction projects following the new rules were then called “manufactured homes”, and the industry has continued to grow, with 93,000 homes being developed in 2017. The Institute for Building Technology and Safety designated Texas as the number one market for manufactured homes that same year, with 17,676 sold in the state alone.
Knowing the basics
We wrote about ‘How a Car Title Loan Works and is it Worth a Try?’ to emphasize that the most important thing for lenders to gauge is a borrower’s ability to repay the loan in full. The same concern arises with manufactured home loans. There are a number of loans for these types of properties, with some being similar to your traditional home mortgages, and car loans as well. A general rule of thumb is that these loans require a pledge to the home. If it’s also owned by you then the land it rests on will be collateral. Title loans for these are backed by collateral, and in this case, it is simply your manufactured home. Should you default on the loan, the lender will be able to reclaim the property from you.
Rules and regulations
The federal Department of Housing and Urban Development lists certain standards for the size of these loans depending on what it will be used for and if it has met certain standards. A tip given to borrowers is that lenders are more likely to issue you a loan if you intend to purchase both the home and the land it will be on. Despite the long list of criteria from The Federal Housing Administration, from the home having been built after June 15, 1976 to compliance with the HUD Code among others, a title loan is a popular loan choice. This is largely due to its low down payments, fixed interest rates, and rules which are consumer-friendly.
Chattel loans, on the other hand, are for manufactured homes that will be placed in parks or communities designated for them. They only finance the home itself, and not the land it is on, thus classifying as a personal property loan which is much smaller than one for a real estate property. However, interest rates for these are higher and repayment periods are shorter. Government and VA Loans may also be used, should your manufactured home qualify.
Paying back
Regardless of the loan you decide to pursue, paying it back will always be a concern––whether that be when or how. These days, there are a number of convenient options in which you can do this. These avenues include paying through mail, websites, or even through your mobile phones. As for the minimum amount of payment, 800LoanMart explains the three deciding factors in getting a title loan: the loan’s value, your interest rate, and your timeline to repay––which is usually up to three years. It’s always safe knowing that there are choices suited to your convenience. There aren’t even any penalties for borrowers who make early payments. This is comforting news to hear as more and more people continue to seek out quality and affordable housing options, as the Manufactured Housing Survey continues to note on a regular basis. This may give low-income populations the security they very well need.
Founder Dinis Guarda
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