Finance Roll

Obtaining a mortgage for a mobile or manufactured home is possible. Despite the fact that many manufactured homes today are without wheels and almost indiscernible from traditional homes, the financing still remains a little less than conventional. To learn more about getting a mortgage for a mobile home, keep reading.

Cost of Borrowing Is Higher

Typically, the less mobile your manufactured home or trailer is, the better the deal you can get on your financing.

In the past, mobile homes were financed as private property, so they were financed the same way as cars and boats. Typically, they required 10 percent down and were then financed over a 5 to 15 year period. The interest rates were also higher than with a traditional home.

Today, thanks to the influx of mobile home residents, requirements are changing. Typically, you need at least 5 percent down and can even finance for terms as long as 20 to 30 years. However, because mobile homes either depreciate or appreciate at a much slower rate than traditional homes, the interest rates and cost of borrowing is higher.

It's Still Tax Deductible

The good news is whether the mortgage or loan is for personal property or if it's structured as a car loan, if the interest paid is for a loan that's paying for your principal and primary residence, then it's tax deductible.

If you own the land underneath the mobile home too, then make sure you're also getting the tax benefits of having the property titled and registered as real property. Yes, you'll be on the tax rolls, but those real estate taxes then become tax-deductible.

Limited Lender Choices

When it comes to manufactured loans, you don't have to finance directly from your sales agent, but you also don't have a lot of options for manufactured home financing.

Lenders in the U.S. that will finance manufactured or mobile homes include NationsBank (will lend without land), FirstUnion (requires land and double-width manufactured home), First National Bank (doesn't loan for "mobile" homes), KeyBank (charges $99 fee), and GreenTree.

Read the Fine Print

Home ownership is a dream, and manufactured homes make that dream affordable for many people who cannot otherwise afford a more traditional home. However, because this particular housing market is one where the customers tend to be not aggressive when it comes to finances and negotiations, it's important to read the fine print, understand any and all financing agreements and to always deal with a company that you trust.