Purchasing a mobile home is an affordable method to enter the housing market. Mobile homes are far less expensive than stand-alone single-family homes. And because they are manufactured to be moved, mobile homes are often treated as personal property instead of real estate.
This designation keeps property taxes relatively low and saves homeowners on insurance over the long term. While the fluidity of a mobile home is appealing to some, it creates a challenge in mobile home financing, even for the most qualified borrowers.
Mobile Homes Don’t Build Equity Like Stick-Built Properties Do 🏡
Unlike single-family stick-built residences, most mobile homes do not build as much equity over time because they are not permanently secured to land. And because they are made to be mobile, these homes often carry higher interest rate loans than permanent structures. The bank views them as personal property and therefore attaches a greater level of risk to the loan.
The higher interest rate offsets some of that risk for the lender, but it creates a situation where home equity is difficult to acquire over time for the homeowner. Similarly, mobile homes depreciate like personal property. Over time, the structure may be worth less than the amount left on the mortgage, making it nearly impossible to build equity without affixing it to land that you own.
If you’re thinking about getting a home equity loan on your mobile home to help pay for a major expense, consolidate consumer debt, or fund a project around the house, you do have some sound borrowing options, though.
Finding the Right Mobile Home Equity Lender 🙋
Heading to your local bank or credit union probably won’t yield the results you hoped for with a home equity loan or home equity line of credit (HELOC) on a mobile home, but it’s worth a try. Banks and credit unions, as conventional lenders, are prone to decline home equity loan and line of credit applications for mobile homes because of the risk of depreciation.
However, there are a few select lenders nationwide that can see through the perceived risk and provide financing to mobile homeowners. In most cases, the following requirements must be met before a mobile home equity loan or line of credit is approved:
- There must be decent equity in the home, meaning the first mortgage is no more than 60-80% of the home’s market value.
- The home will typically need to be double-wide or larger.
- The homeowner must own the land on which the mobile home sits.
- The mobile home must be considered real property, not personal property.
- The mobile home must meet the minimum requirements of permanency dictated by each state.
If these requirements are met, most lenders specializing in mobile home equity loans or lines of credit will offer affordable lending to well-qualified borrowers with good credit scores.
Mobile Home Equity Lending Experts Do Exist 👔
In your search for equity financing for your manufactured or mobile home, start with an industry leader who is an expert in mobile home equity funding:
- Cascade Loans – Cash-out home equity loans; triple, double, and single-wide programs; must speak to a licensed professional for more eligibility information.
- White River Credit Union – 80% LTV; must be located in Vermont; set on a gravel or cement pad; have wheels and hitch removed; skirting installed between base and pad; and built after 1976.
Manufactured home mortgage lenders like these understand the unique situation of mobile homeowners. They can provide guidance on the type of home equity financing that’s available based on the home’s structure, its location, and your credit history.
Two Alternative Borrowing Options💲
1. Obtain a Personal Loan 💵
If you’re unable to secure home equity financing for your mobile home or need cash fast, you may want to consider a personal loan instead.
You can quickly apply online to see if you qualify for a personal loan up to $50,000 or more, with a low interest rate, to be used however you choose. The approval and closing process is much simpler with a personal loan.
Top Personal Loans ✅
- Upstart – Accepts a wide range of credit scores and uses more than a score to help people get approved for a $1K – $75K personal loan with low fees and interest rates. Checking your rate online won’t affect your credit. Available in all 50 United States.
- Next-Day Personal Loan – Considers all credit types for personal installment loans and cash advances from $100 to $40,000. Not available to residents of Connecticut, New Hampshire, Washington, and Vermont.
- Upgrade – Provides personal loans from $1,000 to $50,000 that can be used for home improvement, debt consolidation, a major purchase, or something else. Offers 2-7 year repayment terms, but requires a credit score of 580 or above (640 recommended). Checking your rate online won’t affect your credit. Available nationwide.
2. Refinance Your Current Mobile Home Mortgage Loan 💰
Another viable option would be to refinance your current mobile or manufactured home mortgage loan and take cash out. Often, you can lower your interest rate and your monthly mortgage payment, too!
Top Mobile Home Refi Specialists ✅
In addition to the manufactured and mobile home mortgage lenders mentioned previously, there are a few mobile home refinance specialists nationwide:
- Credit Human – $25,000 maximum cash out refinance loan for home-only, $75,000 for land home; home must be multi-section; maximum age 20 years old; loan-to-value (LTV) of 65%.
- 21st Mortgage Corporation – Available in most states. Consolidation / cash-out options require a minimum credit score of 600.
- Triad Financial Services – The home must have been constructed after 1976, be a double-wide with at least 600 sq. ft. of living space, affixed to a permanent foundation, and must be on land or a lot that is also being financed. Available to most states.
- Manufactured Nationwide – 80% FHA, 90% VA, and 90% USDA manufactured cash-out refinance loans; 100% streamline refinance loans; homes cannot be in a park or on leased land. Available in all 50 states.
Home refinance companies offer several types of mobile home refinance loans that may allow you to borrow additional money.
Then there are comparison shopping websites that allow you to receive free home refinance quotes from multiple lenders to see what you might qualify for with each. Select the best option from the available offers to move forward.
Final Thoughts on Mobile Home Equity Loans 🏠
Obtaining a home equity loan on a mobile home can be difficult for most people. However, there are other options worth considering, too. Either way, borrowers should have a decent credit history, verifiable income, and a healthy credit score to qualify for the lowest APR mobile home equity loan, line of credit, cash-out refinance, or personal loan.