Mobile Home Equity Loans

This is a fact that we all heard about it as mobile homes depreciate over time. While this can be true, but it is important to understand that some mobile homes actually increase in value. The value of the mobile home will be much higher than what it was bought for. This difference is called mobile home equity.

Equity loans become very useful if a person wishes to start a small business enterprise after buying a home. Usually the lenders would not ask any questions about the purpose of the equity loan – it can be used for anything from renovating the home to going on a cruise. Having said that, it is essential to remember that a home equity loan does increase the indebtedness of the person, and it is best to avoid them. No lender would provide a second equity home loan, no matter how much equity is built up.

The process of taking a mobile home equity loan is much simpler than taking a normal loan. This is because the mobile home itself will be kept as collateral, or to be more specific, the equity on the home will be the collateral. This is all about how does a home equity loan work.

Typical mobile home financing strategy to keep in mind:

• Down payments as low as 5% for mobile homes that are in mobile home park’s is accessible.

• Typically 3 years of employment is required.

• Minimum credit scores of 600 and above, possible exceptions available when purchasing new mobile homes and putting a cash down payment of 40% or more.

• Loan terms up to 240 months for used mobile homes and 300 months for new homes.

•Debt ratio’s generally cannot exceed 45% for all debts and 34% for housing; this includes the lot rent if the mobile home is in a mobile home park.

• Mobile homes must be built to HUD standards.

• Secondary/Vacation home loan programs are available, although lenders will require a down payment of 20%

• A mobile home lender will calculate the value of the mobile home by using a book value or an appraisal.

Daryl Stewart

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