Mobile Home Park Refinance Source
Nereu Theiss
If you are an investor looking to refinance the mortgage of a mobile home park, there are a few things you need to consider. You probably already know that the financing process looks slightly different with mobile homes, but refinancing is still a lucrative option. Here is a quick guide to refinancing a mobile home park.
Refinance your mobile home park to secure a lower interest rate. This lowers your monthly payment and keeps more money in your pocket. Investors can take advantage of the historically low-interest rates to invest back into their business.
Cash-out refinances are a great option for investors. With cash-out refinance, you replace your existing mortgage with one higher than what you owe on the investment property. The difference goes to you in cash. You can use these funds for any needed renovations on the shopping center to help you make more money in the long term. You could also choose to invest that money into new projects or simply have emergency cash on hand.
Lenders need to determine that you and your business will be safe borrowers. They will consider many factors such as business credit, net operating income, and operating history. For mobile homes, there are also special requirements for refinancing. Every lender is different, but you can expect the following conditions for a mobile home park:
What is the reason for Refinancing?
-- Select Refinance Type --Refinance - Cash OutRefinance - No Cash OutRefinance - Home ImprovementRefinance - Debt ConsolidationRefinance - Change Loan TypeOther Loan Purpose
Whether you want to refinance an investment property, rental property, or owner-occupied
commercial property, New City Financial offers the best refinance rates for those with good or bad credit.
A mobile home loan is a loan for factory-built homes that can be placed on a piece of land. Styles may vary from modest trailers to dwellings that look like houses attached permanently to the land upon which they sit.
Mobile home loans differ from a traditional property loan because most lenders and counties do not consider them real property, but rather personal property. In fact, in many counties, a mobile home is taxed by the department of motor vehicles rather than the property tax assessor. In most cases, if you want to buy a mobile home and place it on land that you lease, your loan will more closely resemble a personal loan, with higher interest rates and shorter terms than a traditional home mortgage.
Mobile homes are sometimes located in a mobile home park where the park owner holds title to the land and you lease it. In these cases, the homeowner leases a plot of land but owns the mobile home itself. Many lenders will require you to sign a three-year lease minimum for the land before they will lend on the mobile home.
If you have a credit score on the lower end, look for a lender that is strong in the USDA, FHA, and VA programs. Conventional loans will not be so forgiving of scores below 700. You may get your loan approved, but it will carry higher rates and a term of 20 years or less.
Mobile home refinancing can be complex, but understanding the requirements will help simplify the process. The first step is to determine whether your home needs to meet certain guidelines to qualify for financing.
Your mobile home must also comply with building standards set by the U.S. Department of Housing and Urban Development (HUD). Look for a HUD tag (metal plate certification label) outside and a data plate (paper label) inside.
Before you decide, you should also look at the terms of a new loan. This includes the interest rate, the monthly payment, and any fees that come with the refinance. You should also think about how long you plan to live in your home and if the savings from refinancing will be worth the costs.
After choosing a lender, maintain regular communication with your loan officer and have all necessary documents about your manufactured home readily available, especially for the appraiser. If the goal of your refinance is to transition your manufactured home to real property, be sure to lock in your mortgage rate for a duration that accounts for the time needed to affix your home to its permanent foundation.
Conventional loans are best for borrowers with a credit score of 620 or higher and at least 5% equity in their manufactured home. Both fixed-rate mortgages and adjustable-rate mortgages are available. Cash-out refinancing may be an option for owners of multi-width manufactured homes (single-width homes are not eligible), according to Fannie Mae guidelines.
Veterans and active duty military personnel can take advantage of low interest rates on VA loans thanks to their backing by the U.S. Department of Veterans Affairs. A credit score of 620 or higher is typically required, and the maximum loan term is 25 years.
The U.S. Department of Agriculture developed USDA loans to encourage homeownership in designated rural areas. To qualify, the mobile home must be less than one year old, and borrowers must meet income limitations.
The Consumer Financial Protection Bureau reported that most purchase loans for mobile homes were higher-priced than mortgage loans, with many being chattel loans. If you rent the site your mobile home is on, a personal property loan may be your only financing option.
Deciding to refinance mobile home loans can improve your finances, but it also comes with challenges and costs to consider carefully. Before deciding to refinance mobile home loans, understand the advantages and disadvantages.
Greetings - I'm in the middle of refinancing my primary residence. The home has a wood fireplace in the basement, and electric radiant heat upstairs. However my appraiser listed the home as needing a "Primary heat source in the basement, as the fireplace alone devalues the property." So now I have to do some work for this refinance.
First I'm aggravated by this, as the basement (although partially finished) has no bedrooms anyway. My mortgage lender is telling me to simply install electric baseboard heat, and that will suffice as long as they're wall mounted and not portable. But I have a few questions....
3. Here is a link for what I was going to go with. Im not concerned about the cost of usage, as Im honestly never going to use them. I simply want to get this refinance completed asap. I prefer my fireplace and get free lumber anyway.
Across the country in Ephrata, Washington, Kirk and Patricia Ackley sat down to close on a new mobile home, only to learn that the annual interest on their loan would be 12.5 percent rather than the 7 percent they said they had been promised. They went ahead because they had spent $11,000, most of their savings, to dig a foundation.
More than a dozen Clayton customers described a consistent array of deceptive practices that locked them into ruinous deals: loan terms that changed abruptly after they paid deposits or prepared land for their new homes; surprise fees tacked on to loans; and pressure to take on excessive payments based on false promises that they could later refinance.
Buyers told of Clayton collection agents urging them to cut back on food and medical care or seek handouts in order to make house payments. And when homes got hauled off to be resold, some consumers already had paid so much in fees and interest that the company still came out ahead. Even through the Great Recession and housing crisis, Clayton was profitable every year, generating $558 million in pre-tax earnings last year.
Clayton provided more than half of new mobile-home loans in eight states. In Texas, the number exceeds 70 percent. Clayton has more than 90 percent of the market in Odessa, one of the most expensive places in the country to finance a mobile home.
To maintain its down-to-earth image, Clayton has hired the stars of the reality TV show Duck Dynasty to appear in ads. Buffett, meanwhile, has become known as a Billionaire of the People, grousing publicly that his secretary pays a higher tax rate than he does and delivering public pronouncements riddled with folksy aphorisms and quotes from Mark Twain.
Clayton dealers often sell homes with no cash down payment. Numerous borrowers said they were persuaded to take on outsized payments by dealers promising that they could later refinance. And the average loan term actually increased from 21 years in 2007 to more than 23 years in 2009, the last time Berkshire disclosed that detail. Vanderbilt advertised 30-year loans in printed literature available at Clayton Homes sales lots this winter.
Mansfield had a lousy credit score of 474, court records show. Although she had seasonal and part-time jobs, her monthly income often consisted of less than $700 in disability benefits. She had no money for a down payment when she visited Clayton Homes in Fayetteville, N.C.
Many borrowers interviewed for this investigation described being steered by Clayton dealers into Clayton financing without realizing the companies were one and the same. Sometimes, buyers said, the dealer described the financing as the best deal available. Other times, the Clayton dealer said it was the only financing option.
Customers said in interviews that dealers misled them to take on unaffordable loans, with tactics including broken promises, last-minute changes to loan terms and unexplained fees that inflate loan balances. Such loans are, by definition, predatory.
Some borrowers said they felt trapped because they put up a deposit before the dealer explained the loan terms or, like the Ackleys, felt compelled to swallow bait-and-switch deals because they had spent thousands to prepare their land.
A couple years after moving into their new mobile home in Ephrata, Washington, Kirk Ackley was injured in a backhoe rollover. Unable to work, he and his wife urgently needed to refinance the costly 21st Mortgage loan they regretted signing.
They pleaded with their lenders several times for the better terms that they originally were promised, but were denied, they said. The Ackleys tried to explain the options in a call with a 21st supervisor: If they refinanced to lower payments, they could stay in the home and 21st would get years of steady returns. Otherwise, the company would have come out to their rural property, pull the house from its foundation and haul it away, possibly damaging it during the repossession.
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