Mobile Home Refinance Loans Becoming More Available
Traditional mortgage lenders have long had a history of not being friendly when it came to refinancing manufactured home loans. However, with more people living in a mobile home refinance loans have become more available. With the many accessories available for mobile homes, they are no longer considered the car loans of the mortgage industry.
When mobile homes first hit the market, many lenders were reluctant to offer financing as they were considered by most to fall into the same category of vehicles. For the most part they would depreciate in value quickly, unlike a traditional house that would appreciate in value over time. It was unlike that a mobile home refinance loan would be available due to the rapid depreciation leaving little in the way of equity over a few short years.
However, the quality of manufactured housing, coupled with the federal and state laws governing their construction and an owners continued maintenance and improvements have slowed the depreciation. Now owners have been able to find non-traditional financing as well as mobile home refinance options to pay for additional improvements, or other needs as well as vacation loans taken out against the equity built into the home.
Using Equity To Pay Down First Mortgage
In many cases a person may have bought their mobile home with an interest rate higher than currently being offered. They may have built up enough equity that a mobile home refinance loan can be found to pay off their first mortgage, and bring down the monthly payment amount. Another mobile home refinance option may be to reduce the principal amount owed and continue with the same payment to help pay off the mortgage quicker than with the initial loan.
Typically, homeowners can use the equity in their home as collateral on a second mortgage. They still make payments on the existing home loan balance, while making additional payments on the second mortgage. By using a mobile home refinance loan, they may be able to pay off the balance, while using left over funds for a vacation or for educational expenses while leaving themselves with only one payment per month.
The availability as well as the amount that may be available for a mobile home refinance loan will hinge on the condition of the mobile home and the property on which it is located as well as the amount owed on the principal amount. Many lenders offering mobile home refinance loans, up to 80 percent of the equity can be borrowed with a second mortgage agreement, however the borrower’s credit standing will have an impact on the interest rate available.
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