Financing a Mobile Home

Financing a mobile home mortgage can be tricky, but it's not impossible! Millions of people live in mobile homes across the globe, and you can too. On the up-side, mobile homes normally cost a lot less than a regular stick-build house (unless you've got a mobile mansion or live in an expensive part of town, or both), but on the downside, many lenders want a down-payment of up to 20% of the purchase price. So when you're looking for a mobile home, keep a couple things in mind to make finding a loan easier. First, the less mobile a manufactured home is, the better the financing deal you can get on the mortgage.

Mobile homes have historically been financed as personal property, which accounts for the large downpayment and higher interest rates than a regular mortgage. Nevertheless, if the mobile home is your principal home, the interest paid will be tax-deductable.

Manufactured homes, much like cars, usually lose value over time, since they have a shorter lifespan than traditional houses, so keep that in mind. One exception to that rule is if you are living in a coveted part of town (for example, a beach-front mobile home in Malibu). Then you can probably expect some appreciation over time. Some folks have been known to buy a $20,000 trailer and a decade later sell it at $100,000! It's like they always say, "Location, location, location!"

Since mobile homes are a niche market, many lenders don't deal with them. But you will find several lenders who deal specifically in manufactured home mortgage financing, such as Green Tree Financial Servicing Corp. and Green Point Credit Corp.

Many mobile homes can be financed for only 5% down, but the downpayment can also be as high as 20%, so be sure to ask. The best rates normally go to the buyers whose potential homes most closely resemble conventional homes. The less mobile, the better. Also, new mobile homes tend to have slightly lower interest rates than used manufactured homes.

Owner Financed Mobile Homes

Less common than conventional financing, occasionally you may have the opportunity to finance your mobile home mortgage through the previous owner. By doing this, you may be able to get a lower interest rate than the lenders are offering you, and you will be sending your payments directly to the previous owner.

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