Mobile Home Refinancing – Options and How To Guide!

Nov 18, 2023 By Susan Kelly

When considering getting refinancing for your mobile home, you should know upfront that it is different compared to traditional homes. There are specific requirements that aren't as strict for traditional homes, and you have to meet specific requirements. The essential difference in requirements comes from the way you make and install these homes.

If you are here to understand these requirements of mobile home refinancing, let's discuss what options you have. Furthermore, what do you need to do to get your refinance manufactured home approved?

Mobile Home Refinancing – Things You Should Know

Let's go over some essential refinancing for your mobile home that you should be aware of.

The Difference Between Real Property vs. Personal Property

The major difference here is that when it comes to real property, it encompasses anything attached to the land that you buy. So, for example, if it has a house, barn, manufacturing building, etc., they constitute a real property.

Now, everything that you can move on the same land will be your personal property. So, in that case, your car, furniture, and similar things are part of it. So, if you own a house that you buy because you can move it even if you never do, it is personal property.

This significant difference is what makes the mobile home refinancing the challenging part.

Different Types of Mobile Houses

There are three major types of houses that you can typically categorize when it comes to mobile housing.

Mobile Home – You give this term technically to movable on-wheel housing but which the manufacturer made before 1976. Most of these homes aren’t approved and inspected as in modern times by the U.S. Department of Housing and Urban Development (HUD).

Manufactured Home – Movable houses HUD has approved whether they have tires or not, but you build them on a mobile home chassis. Mobile home is the most common misnomer people use for these houses.

Modular Home – They need to follow typical HUD regulations, including state orders but are typically built off-site. After finishing, they deliver it to your land.

Mobile Home Refinancing Requirements

  • Your mobile home must be set on a permanent foundation and isn’t connected to tires to move around.
  • If otherwise, you have tires attached, you are left with fewer options and will need different types of inspections.
  • It would be best if you had a credit score that should be higher than 620, though in some cases, individuals have gotten approval for only 580.
  • A DTI requirement of lower than 43%.

Pros and Cons of Mobile Home Refinancing

Like any other refinancing option, refinance manufactured home options have some advantages and disadvantages.

Pros

  • You can quickly lower your monthly interest rates but may have to accept longer loan terms.
  • It allows you to pay off other debts using home equity when you cash it out, such as student loans, medical bills, etc.
  • Flexible mortgage conditions if you get approved.

Cons

  • Extra fees, such as closing cost, is required, but first, the loaning body will search your history and make an appraisal.
  • In some cases, and based on the current market trend, you may have to pay more in the long run as compared to already established loan terms.
  • Cashing out may cause you to pay more per month for mobile home loans than other loan types.

How to Do Mobile Home Refinancing?

Before we move on to the processes and steps of refi manufactured home, is it possible or not?

Can I Refi Manufactured Home If I Had a Mobile Home Loan?

Yes, you can! Just like other typical mortgages or home financing loans, you can always do it under certain conditions. So, if you are looking for affordable housing but are okay with providing more documentation if you have to do refinancing, it is a great option.

Step By Step Guide to Achieve Mobile Home Refinancing

Please follow these steps to get your refinancing for manufactured homes approved quickly.

Discuss With Your Mortgage Manager or Agent

A lending party may likely require you to permanently attach your mobile home to your owned land, thus making it immobile.

If you don’t want to do that, please consult with your agent to discuss better options or if you have to change the loan party.

Choose the Type of mobile home refinancing Loan

Here are some types of loans that you can get. You need to remember here that most of these may ask you to fix your mobile home by attaching it to a permanent foundation.

Conventional Loans – The most common type of mortgage loans and may need an increased credit score than most, though lower interest rates than what you get from federal loans.

FHA streamline refinance – Must meet their and HUD’s guidelines plus requires existing FHA loan in progress. It is much cheaper and more manageable, though, so it is a good option.

VA Streamline Refinance – Same as FHA, if you are a beneficiary of a VHA loan, you can convert it to a streamlined one.

USDA Streamline Refinance – Same as the above two options.

Research for the Best-case scenario

Some of these steps will be involved during the consultation with your agents. Sometimes, your current agent might not have a good option for you, so he may ask you to reassess the situation.

In that case, you have to search for new information about your standing. No matter which company you choose for your new mortgage, keep in contact with your agent. He can always give a bit of good advice.

Apply for Refinancing

Now that you have chosen which you want arrange the necessary documents, such as proof of income or other properties you own.

Pay the Closing Costs to Begin

Now that you are ready to get your refinancing approved, you must pay the transfer or other costs to convert to the new mortgage. You will receive documentation from your refinancer on what you need to pay, which may be anywhere between 2-6% of the loaned amount.

Final Words

Now you have enough information to choose from different mobile home refinancing options and get your loan approved easily.

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