In the 1950s and 1960s when mobile homes started becoming popular it was virtually impossible to get a mobile home mortgage from a traditional lender. Since they had wheels and could moved they were treated as a vehicle and typically a mobile home mortgage was subjected to the same interest rates as cars and trucks, higher than that available for home purchases.
Up until a few years ago there were few options in financing the purchase of a manufactured home, but with the growth of the internet, a little research can find numerous opportunities to find a mobile home mortgage. Although many of the same factors involving any other type of loan will apply, good credit rating, an inspection of the mobile home and if applicable the lot on which it sits, there are lenders willing to finance the purchase.
When mobile home parks began opening, a mobile home mortgage became slightly easier to obtain, especially if the mobile home was situated on a lot and the wheels had been removed. Still, lenders were reluctant fearing the owner could hitch it to a truck and disappear.
Land Ownership Change Mobile Home Thinking
When people began buying mobile homes and putting them on land that they owned, some lenders determined the ownership of the land made the buyers more stable and agreed to start handling mobile home mortgage loans for those going on private property. It was typically finance companies offering the loans and even today, traditional banks are reluctant to offer a mobile home mortgage.
Many mobile homes offer the amenities usually found in traditional homes, one of the primary concerns of banks and other lenders is that mobile homes depreciate, unlike a traditional house or modular home, which tend to see their value go up over the years. Getting a mobile home mortgage is harder because their value typically falls every year, similar to a car, but in contrast to a vehicle the purchase price is considerably higher and some lenders fear the mobile home will not outlast the length of the mortgage.
Obtaining a mobile home mortgage for a used manufactured home is even more difficult, regardless of the age or condition, but there are several lenders willing to write a mobile home mortgage, with interest rates in line with the additional risk of issuing the loan. Additional down payments may also be required to bring the principal amount of the loan down considerably.
