The Definitive Guide to Mobile Home Mortgages

Whether you are looking for a large or small home, a traditional or modern space, an urban or rural location, a mobile home could meet your needs. Significant advances have been made in recent years giving birth to a whole new generation of manufactured homes. There still exist traditional single wide and double wide mobile homes, and there are also homes that make the most of luxury living on a small scale.

When it comes to financing your mobile home, and if desired the land it sits on, obtaining a mortgage can seem overwhelming. This guide seeks to demystify the mobile home mortgage process, and give you the information you need to be an informed borrower.

1. Cost. Manufactured and mobile homes are generally significantly less expensive than stick built homes. You are likely to see substantial savings whether you purchase a new or used mobile home. Keep your monthly mortgage payments low and pay off your home years sooner than you might with a stick built home.
   
   
2. Convenience. If you want to build a home in an especially rural area it could be difficult, time consuming, and expensive to transport materials, equipment, and labor to the area. In comparison a mobile home is built off site and transported to the home's location.
   
   
3. Going Green. Mobile homes can be more environmentally friendly than their stick built counterparts. Because these homes are often on the smaller side they use fewer resources during construction and to maintain, heat, cool, and power. They often require less land to be cleared on the lot, preserving more of the natural setting.
   
   
4. Timing. A traditional home build can take several months to well over a year, while a mobile home can be in place much more quickly.
   
   
5. Portability. If you are looking for a low-cost home that you can be living in soon, but eventually would like to build a larger, permanent structure down the road, consider a mobile home that you can eventually sell and move to another location. Though possible it is often impractical to pick up and relocate a stick built home.

One of the most popular mobile home loans is the FHA Title I mortgage. An FHA loan is backed by the Federal Housing Administration, an agency of the federal government. This means that if the borrower defaults on the mortgage and the lender is forced to foreclose on the property, they can collect on the mortgage insurance policy with the Federal Housing Administration for any losses they incur. This lowers the risk to mortgage lenders, enabling them to offer better rates and terms to borrowers.

This loan can be used to purchase or refinance a mobile home, the lot to place the home on, or both the home and the lot. Some of the requirements of this mortgage program include:

• The home must be used as a primary residence. Second or vacation homes and rental properties are not eligible.
• Maximum Loan Amount: home only - $69,678, lot only - $23,226, home and lot - $92,904
• Maximum Loan Term: single wide home only - 20 years, single wide home and lot - 20 years, lot only - 15 years, double wide (or larger) home only - 25 years, double wide (or larger) home and lot - 25 years
• If the mobile home mortgage is used to purchase the home only the site on which the home will be placed must meet FHA guidelines, such as sufficient water and sewer.
• New and used mobile homes financed with an FHA loan must meet the Model Manufactured Home Installation Standards, and new homes must carry a one year manufacturer's warranty.

In order to be approved for a mortgage to purchase or refinance a mobile home you will have to meet the requirements or guidelines of the loan. To get started your loan consultant will ask you for information on your credit history, assets, other debts, and income. If based on the initial information you seem to be a good candidate for the mortgage you will be pre-qualified for the loan, and move on to the full application. The full application will involved documenting all the information provided. Some of the requested documentation will likely include:

• A copy of your credit report. This can be obtained from the credit bureaus by your loan consultant with your permission. Your credit report will give the bank or mortgage lender information on how you have done in the past at paying your bills on time, and on your other outstanding debts such as auto loans, credit card balances, and student loans.
• Paystubs and W-2s. These forms from your employer are used to document your monthly income, and show that you will be able to afford your mortgage payments. If you receive income from another sources such as social security, disability, child support, or alimony you will be asked to document this as well.
• Bank Statements. You will use the statements for all checking, savings, retirement, and investment accounts to show the amount of your assets. Be sure to include all pages even those that are blank as the person reviewing your loan application will need to verify that there is no important information on those pages.
• Purchase Contract. If you are buying a mobile home rather than refinancing the lender will want to see the terms of the purchase laid out in the contract.

Once the loan process is started your bank or lender will also order an appraisal and title work to show the value of the property and that it is free of any undisclosed liens. Depending on your scenario there may be other required documentation requested either up front or during the loan process. Your application is essentially a sales pitch to those with money to lend that you are an excellent candidate to borrow the funds needed to purchase or refinance the property. The more documentation you can provide to show that you will repay the loan as agreed the stronger your application will be.