When buying a home, one of the options available to people who do not have enough money but are thinking of purchasing housing is through financing. While this may be true for traditional houses, the same cannot be easily said for mobile homes. Obtaining a loan to purchase a mobile home is still a pretty difficult thing to do, although there are signs of lending companies beginning to come up with loans that can suit the needs of mobile home buyers.
The Mobile Home Loan: Not a Mortgage
Even when you might call a mobile home a house, the loan that you may be granted to purchase one is usually not considered as a mortgage, therefore you are not entitled to tax benefits that mortgages may get. A lot of banks and some lenders do not consider giving out long term loans for the purchase of mobile homes simply because they are seen as risky loans. The value of mobile homes is not seen to rise in value unlike their traditional counterparts, the site-built houses. With this fact in mind, lenders who do give out mobile home loans often place a hefty interest rate on these kinds of loans and sometimes give these loans terms that last lesser than the usual 15 to 30 years that home loans have on them.
These lending institutions also take into account the reasons why a person decides to buy a mobile home instead of the traditional home. This usually equates to the person not having enough financial clout to lean towards the purchase of a traditionally constructed house. This thought plays a huge part in the granting of loans for mobile home purchases and the weeding out of those who can pay for the loan from those who are seen as incapable of doing so.
Getting Your Loan for a Mobile Home Purchase
Despite the flak that mobile home buyers may get from lending institutions about their home choice, there are some lenders who do welcome people who opt for these convenient and fast home options. Getting a mobile home loan from lenders who do allow it is becoming more rampant of late and many of them are beginning to treat these mobile home loans like mortgages, giving these mobile home buyers the 5 percent down payment option with 20 to 30 years to pay off the loan. This is a huge change from the usual 10 percent down payment that was required from buyers years ago that also carried a short 15 to 20 year repayment term.
One easy way to have your mobile home loan treated as a mortgage is to own the land your mobile home is placed on. The advantages that people who do this have over those who place their mobile homes in mobile parks include tax benefits and no land rental fees.
While it is still pretty tough for people to get good quality loans to purchase mobile homes, it is possible to find relatively good loans to use to purchase these new and improved mobile residential choices.
Scott is an expert on mobile home loans, as well as
manufactured home loans and bad credit mobile home loans. Scott lives in WA.
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