A chattel loan for a mobile home might be your best bet in financing a mobile or manufactured home: particularly when the home itself has not been permanently mounted on a concrete foundation. We will see in this article what a chattel loan is and when it should be used, how it compares to other alternatives, and why it may be easier to take out with the help of LoanLocker than others.
What Is a Chattel Loan?
A chattel mortgage, known also as a chattel loan is a form of financing supported by mobile personal property, such as a manufactured home, equipment or vehicle-rather than land or real estate. The house is used as the collateral and although the borrower technically owns the house, until the loan is paid in full, the lien is held by the lender.
The important Characteristics of Chattel Loan:
- Swift approvals and funds
- Interest rates are usually above the normal mortgage quote
- Fewer years on the loan (this is typically 15-20 years)
- Property (mobile home) is easier to be moved or sold again
In case you still ask, what is a chattel loan? Imagine that it is financing a car or RV. You are taking out a loan only to buy the object not land, or other more permanent buildings.
When Is a Chattel Loan the Right Choice for a Mobile Home Purchase?
Chattel loans for mobile homes purchases are frequently the right move in particular cases. These are the situations in which it can be the most sensible:
- The home isn’t permanently affixed to land: When the manufactured home is taken to a mobile home park or to land under a lease agreement it becomes personal property and a loan with a chattel mortgage is the type of loan required.
- Faster approval with potentially lower upfront fees: Chattel loans require shorter time to close than traditional types of mortgages and also tend to be associated with lower processing charges.
- Flexibility to relocate the home: The fact that the home is a personal property means that in case you need to relocate, you would find the task simpler, which is great, especially when someone is not bound to one specific place.
- You’re Buying a Single-Wide or Older Mobile Home: Other lenders only limit conventional financing to new or newer manufactured homes and newer double-wides. In this case a chattel mortgage for mobile homes is more flexible.
Chattel Loan vs. Other Financing Options
Using a Chattel Loan Calculator
It is important to estimate what you are going to pay monthly. A chattel loan calculator would allow you to determine things such as:
- Loan amount
- Interest rate (usually 8%-14% on manufactured homes)
- The length of the term of the loan (usually 15- 23 years)
Can You Finance a Mobile Home Otherwise?
Yes, you can do it but not everything goes with all buyers. Maybe you wonder, can you get a loan on a mobile home off your property? Or, can you get financed on a mobile home when you are not a property owner?
This is what you can do:
- FHA, VA, USDA-backed loans: These loans require installation on a permanent foundation with the homeowner owning the land under a permanent foundation.
- Conventional mortgages: Also deal with the home and land as an instance of real property.
- Personal loans: This will always be an alternative, but it is typically an expensive plan of last resort owing to both higher rates and larger term limitations.
Pros & Cons of Chattel Loans for Mobile Homes
Pros
- Quicker fewer fees up front
- Suitable to dwellings on rented or leased land
- Reduced credit and down payment margin over the conventional mortgages
- RV campgrounds are a hot investment right now which makes mobile home living more acceptable in other regions, even outside of the traditional living spaces.
Cons
- Increased interest mode and a lesser repayment time
- Less protection of borrowers and high repossession threat in case of default
- There is no sales equity/appreciation gain
Who Should Consider a Chattel Loan for Mobile Home?
If you’re:
- Residing in a mobile home park
- In search of a fast money source
- Buying up a wearer or single-wide house
- Desire to move in a flexible location in future
then a chattel loan to buy a mobile home may be the right thing to do.
Why Work with LoanLocker?
LoanLocker a direct private lender based in Tampa, Florida, focuses on the financing of mobile homes through the chattel loan and deals with providing:
- Expert matching with lenders based on your credit, home type OR land situation
- Reduced pre-qualification and application process
- Transparent and fast communication
Are you in a park, on leased land or looking to purchase a movable structure? LoanLocker removes the time guessing game of getting financed.
Are you Ready to Apply?
Start today with https://loanlocker.com/ and get an ideal chattel loan to use on a mobile home today.