Mobile Home Equity Loan

Mobile home equity loan
Let us first understand the terms here. A mobile home, better known these days as a manufactured home, is a home that is constructed in a factory according to the standards set by the U.S. Department of Housing and Urban Development (HUD). Most people take out a mortgage to buy their mobile home. The difference between the current market value of your mobile home and the balance amount on the mortgage you have taken is your mobile home equity. You can utilize your mobile home equity to get a loan.

There are various reasons you might need a loan and a home equity loan is a quick and easy way to get it. With a mobile home equity loan, there is no restriction on how you choose to use the loan money you receive. You can use it to make an investment or, as is the case with a large percentage of people who take mobile home equity loans, use it to pay off existing debts and make yourself more financially stable.

To be eligible for a mobile home equity loan, you must meet the following criteria

• You must own a mobile home and have a mortgage on it.
• You must be eighteen years old or older.
• You must have good to excellent credit ranking.
• You must have a regular and verifiable source of income.

Things that prospective lenders might require about your mobile home when you apply for a mobile home equity loan

• The mobile home must have been built after 1977 or, preferably, in more recent times.
• The mobile home and any changes or alterations that have been made to it must adhere to the HUD code.
• The mobile home must be in a good and well-maintained condition.
• The mobile home must be fixed on a permanent foundation. Many lenders allow relocation. If you're thinking of relocating, be sure you are well-informed regarding zoning regulations and transportation laws.

Home equity loans are popular for the following reasons

• With a home equity loan you receive all the loan money at once. This traditional type of home equity loan is also known as 'second mortgage'. There is another type of home equity called 'home equity line of credit' or HELOC, where you can borrow money over a set amount of time with a credit card issued by the creditor.
• Home equity loans are easy to get, with online applications now making the process quicker. Depending on how well you meet the eligibility criteria, you can get approved for a loan immediately or after a certain period of time.
• Home equity loans usually have a lower rate of interest than most other loans.
• Home equity loans are usually tax deductible. Keep in mind though that this may not be the case if the loan amount is more than the current market value of your mobile home. Then the interest on the loan won't be tax deductible. Talk to your tax adviser before you apply for the loan.
• Home equity loans come with flexible repayment options. You can select to repay with an adjustable rate of interest or with a fixed rate of interest.
• Home equity loans must be repaid over a specified period of time, but you can choose what this time frame will be. It can be anything from five years to 30 years.

When you take a mobile home equity loan, you place your mobile home as collateral. This means that you are pledging your mobile home to guarantee the repayment of the loan. If, for some reason, you fail to repay the loan, the lender can take over your home to recoup his loss. So it is important, at the start, to be sure that you can manage to meet the monthly installment repayments.

There are plenty of financial companies offering mobile home loans. It is a good idea to research different companies, shop around with different lenders and compare loan schemes and interest rates before you pick one to make your loan application to. Read all the terms and conditions regarding the loan very carefully and make sure you understand everything. If you are confused or uncertain about any point, ask the loan officer to explain in detail. Never sign anything you don't understand.