Tap to Read ➤

Mobile Home Equity Loan

Sonal Panse Jan 25, 2019
With a mobile home equity loan, there is no restriction on how you choose to use the loan money you receive.
A mobile home, better known these days as a manufactured home, is a home that is constructed in a factory according to the standards set by the U.S. Department of Housing and Urban Development (HUD).
Most people take out a mortgage to buy their mobile home. The difference between the current market value of your mobile home and the balance amount on the mortgage you have taken, is your mobile home equity.
There are various reasons why you might need a loan, and a home equity loan is a quick and easy way to get it. In such cases there is no restriction on how you use the loan money that you receive. You may use it to make an investment or, as is the case with a large percentage of people, to pay off the existing debts and make yourself financially stable.
To be eligible for this loan, you must meet the given criteria.
  • You must own a mobile home and have a mortgage on it.
  • You must be eighteen years or older.
  • You must have a good credit ranking.
  • You must have a regular and verifiable source of income.
Things that the prospective lenders might require about your mobile home when you apply for a loan are -
  • The mobile home must have been built after 1977 or, preferably, in more recent times.
  • The home and any changes or alterations that have been made to it must adhere to the HUD code.
  • It must be in a good condition and should be well-maintained.
  • It must be fixed on a permanent foundation. However, many lenders allow relocation, and if you are thinking of relocating, then be sure that you are abiding the zoning regulations and transportation laws.
These loans are popular for these reasons -
  • In such cases you receive all the loan money at once. This traditional type of home loan is also called 'second mortgage'. There is another type of home equity, called 'home equity line of credit', or HELOC. In this case, you may borrow money over a set amount of time with a credit card issued by the creditor.
  • These loans can be easily obtained, and with the online applications the process is even more faster. Depending on how well you meet the eligibility criteria, you can get approval immediately or after a certain period of time.
  • These loans usually have a lower rate of interest than most other loans.
  • They are usually tax-deductible. However, keep in mind that this may not be the case if the loan amount is more than the current market value of your mobile home. Also, talk to your tax adviser before you apply for this loan.
  • These loans come with flexible repayment options. You can select to repay with an adjustable rate of interest or with a fixed rate of interest.
  • The repayment is done over a specified period of time, but you can choose what this time frame will be. It can be anything from 5 years to 30 years.
When you take a loan, you place your mobile home as collateral. This means that you are pledging your mobile home to guarantee the repayment of the loan. If in case, you fail to repay the loan, the lender can take over your home to recoup his losses. So, it is important at the start, to be sure that you can manage to meet the monthly installment repayments.
There are many financial companies which offer such mobile home loans. It is a good idea to research different companies, shop around with different lenders, and compare loan schemes and interest rates before you pick one to make your loan application.
Read all the terms and conditions regarding the loan very carefully and make sure you understand everything. If you are confused or uncertain about any point, ask the loan officer to explain in detail. Never sign anything you don't understand.