Types and the eligibility requirements to obtain mobile home loans
Do you know what a mobile home loan is? It is a factory-built home with the necessary utilities. Mobile homes are actually large house trailers that can be parked at a site. You can think of purchasing a mobile home if you’re unable to afford the relatively high cost of conventional homes.
Types of mobile home loans
There are basically 2 types of mobile home loans. You can obtain such a loan for purchasing the property or for buying the mobile home along with the land on which the property is supposed to be erected.
It is relatively easier to take out the second type of loans than the first one. This is due to the fact that the second type of loans generally carry relatively higher amount as they provide finance for purchasing the land too. The borrowers not purchasing the land (in case of first type of loans) can move the mobile home from one place to another. So, it creates increased insecurity for the lenders and they are often hesitant to offer such loans. In such cases, the borrower needs to take out personal property loans, which are usually offered by retailers who sell mobile homes. Moreover, the interest rate on a personal property loan is relatively high as compared to a mobile home loan.
Eligibility criteria to obtain mobile home loans
Go through the following lines to know about the eligibility criteria that the borrowers need to satisfy in order to take out a mobile home loan.
- The mobile home need to be fixed to a suitable site along with proper sewage facility and water supply.
- If the property is new, then it should carry 1 year manufacturer’s warranty.
- The property needs to be the principal residence of the mortgage borrower.
- The borrower should have a good credit score; around 620 for taking out FHA mobile home loans and about 720 to obtain conventional home loans.
- The mobile home must meet the Model Manufactured Home Installation Standards.
- The site (where the mobile home is to be fixed) should be either leased or owned by the borrower.
- The borrower needs to make sufficient down payment depending upon the type of loan he/she is taking out.
- The borrower should have sufficient income to make the home loan payments on time.
You must know that it is quite difficult to obtain mobile home loans for purchasing a mobile home that has been constructed before 1976. This is due to the fact that lenders often become hesitant regarding the life expectancy of such old properties. In addition to this, most of the lenders do not offer loans to the borrowers if he/she doesn’t own the land on which the mobile home is supposed to be erected.
