Mobile Home Loan Rate

Mobile home loan rates are typically higher than traditional real property mortgage rates because the modular built homes are not considered real property and are therefore categorized as Chattel or personal property. Personal property can be moved, and the mobile home loan rate is higher because of the decrease in value the structure suffers when it is moved. In most areas the chattel loan has been replaced by a bill of sale loan with a security agreement that is regulated by the UCC or Uniform Commercial Code. When a mobile home is permanently attached to the land, the higher rates will no longer apply and a conventional mortgage with traditional rates can be granted.

In 1970, the Veterans Housing Act authorized VA mobile home financing to mirror VA mortgages because guaranteed loans were allowed to be made by private lenders to veterans for the purchase of new and used mobile homes. Modular homes constructed after 1976 are called manufactured homes as defined by HUD or the Department of Housing and Urban Development. Mobile home loan rates are typically 3%-5% higher than a real estate mortgage. All such rates are based on the borrowers credit score, commonly referred to as the FICO score.

This score can be obtained by ordering copies of a credit report from any or all of the three nationally recognized credit reporting agencies Equifax, Experian, and TransUnion. If a borrower's score is high, a mobile home loan rate will be low. If the credit score is low, the interest rate will be high. Mobile home loan rates are directly related to the borrower's credit score and down payment amount. Borrowers seeking low financing costs should have over a 20% down payment and a good to excellent credit score.

Those that are seeking the lowest rates should be sure that there are no inaccuracies on their credit report. They should also take measures to improve their credit score before receiving a mobile home loan rate quote. The fastest way to raise a credit score is to pay down all balances on all credit cards to at least 20% of their limits. This gives the borrower a low debt to income ratio and can raise a borrower's credit score up to 30 points in just 30 days. If a borrower would like to receive the lowest mobile home loan rates possible, then they should ideally have no debt at all. After all, the Bible even says in Romans 13:8 "Owe no man anything".

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