Purchasing a mobile home is one method to enter the housing market in an affordable way. 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-Builts Do 🏡
Unlike single-family stick-built residences, most mobile homes do not build up as much equity over time because they are not secured to land in a permanent way. 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 equity is difficult to build over time for the homeowner. Similarly, mobile homes depreciate in value the same way personal property does. 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.
However, 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 have some sound borrowing options.
Finding the Right Mobile Home Equity Lender 🙋
Heading to your local bank or credit union probably won’t yield the results you are hoping for with a home equity loan or home equity line of credit (HELOC) on a mobile home, but worth a try. Banks and credit unions, as conventional lenders, are more 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 have the ability to 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 equity in the home, meaning the first mortgage is no more than 80-90% of the home’s market value.
- The home must be double-wide or larger (in some cases, at least 600 square feet).
- 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 are able to 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:
- EZLender – ($100K minimum loan.) AI lending platform and direct lender that allows borrowers to compare multiple offers from various other lenders. Provides manufactured home equity loan, home equity line of credit, refinance, and other mortgage options for mobile homes.
- Credit Human – $25,000 maximum cash out; home must be multi-section; maximum age 20 years old; loan-to-value (LTV) of 65%.
- 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 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 and can provide guidance on what type of home equity financing is 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 not able to secure home equity financing on your mobile home, or just need cash fast, you may want to consider a personal loan instead. The approval process is simpler, and you can quickly apply online to see if you qualify to receive a personal loan up to $50,000 or more with a low interest rate, to use however you want.
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 – $50K 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 of credit for personal loans, 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. Oftentimes you can lower your interest rate and your monthly mortgage payment too!
Newer tax laws don’t allow you to write off the interest paid on a home equity loan or HELOC unless the money is specifically used toward the home. However, you can still deduct all the interest paid if you refinance your home loan.
Top Mobile Home Refi Specialists ✅
In addition to the aforementioned manufactured and mobile home mortgage lenders, there are a few mobile home refinance specialists:
- 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, a double-wide with at least 600 SQFT of living space, be affixed of a permanent foundation and must be on land or a lot that is also being financed. Available to most states.
- Manufactured Nationwide – 85% FHA, 100% VA and 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.
These 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 get a free home refinance quote from multiple lenders at the same time to see what you might qualify for. 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 an uphill battle for many people. No matter what, borrowers should have a decent credit history, verifiable income, and a healthy credit score in order to qualify for the lowest APR mobile home equity loan, home equity line of credit, home refinance, or personal loan.