By Sean A. Kelly

A mobile home is still a home – or so you think. After all how can it not still be a home? You pay interest and build equity on it just as you would a traditional permanent home. However, you may want to bear in mind that banks and financial institutions may not share your view. This may be why it may be more difficult for you to refinance mobile home or otherwise known as a manufactured home compared to a permanent home with permanent foundations. You probably wish to gain from the equity you have built over your manufactured home but you find it quite difficult to find a bank that would be willing to allow you to refinance your loan as a mortgage. You may be able to refinance your manufactured home under personal property loans or chattel loans but these types of loans are generally more expensive and have shorter maturities.

Banks may hesitate to allow you to refinance mobile home in the form of a mortgage because a manufactured home would not have a land to secure the loan. This is because many mobile homes are not permanently attached to the land. So if you truly wish to refinance the mortgage on your manufactured home you may do so if it is permanently attached to a piece of land that you also own. Either way you may still be able to refinance your manufactured home to a lower interest rate to improve your cash flow or borrow against the equity of your manufactured home if the value of your home is over and above the remaining balance of your original loan. However, whether or not you may refinance your manufactured home as a mortgage refinance may still depend upon the type of refinance offered by the bank you choose to refinance with.

Refinancing your mobile home may not really be that much different that a permanent home refinance. This is because you may need to time your refinancing decision so that it would work more to your advantage than causing more damage to your finances. For example you may want to decide to refinance your manufactured home when you have a healthy cash balance so that you may still be able to pay at least 3% of the loan amount in cash upfront. Perhaps you may also want to make sure that the value of your manufactured home has increased or at least is higher than the amount you wish to refinance by 20%. This is because banks or lenders may require a higher equity cushion as compared to a permanent home. Housing values are generally unpredictable and manufactured home values are even more so. Therefore many banks or financial institutions may require more equity on mobile homes than conventional permanent homes.

Looking for a mobile home loan may be slightly difficult but not impossible. You may opt for federal programs from Federal Housing Administration (FHA) approved lenders to refinance your manufactured homes for a loan term of 20 to 25 years at a fixed interest rate. You may also opt for the Veteran’s Administration (VA) approved private lenders manufactured home mortgage options if you are a veteran and you may qualify for even lower interest rates. State Housing Finance Authorities or Housing Agencies may also provide loans with interest rates that may be relatively lower than that of private lenders. However, private lenders and banks also offer loans for mobile homes but they normally charge higher interest rates because of the nature of mobile homes.

In general, the requirements and restrictions on mobile home mortgages may be tighter than permanent homes. However, you may still apply for one provided you know where to find the best deals for your manufactured home. The important thing is that you know that it may be the right time for you to refinance so that you may achieve your reason to refinance which is most probably to reduce your financial burden.

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