What You Need to Know about Mobile Home Mortgages
Mobile homes differ from conventional homes in that they’re built in a factory and shipped to the final destination. In theory, they can be moved to another site after being installed on someone’s property. This is why there are a number of unusual rules regarding mobile home mortgages.
One requirement of a mobile home mortgage is that the mobile home is permanently affixed to the land.
A second requirement for a mobile home mortgage is that the remaining economic life of the mobile home is longer than the amortization of the mortgage.
An inspector will verify that the mobile home is permanently affixed to the land. They’d verify it is attached via anchors or welded to pilings. They’ll record the home’s CSA number and determine its remaining economic life.
A brand new mobile home has an estimated 35 to 40 year economic life. Mobile homes’ remaining life depends on the conditions it is exposed to and the maintenance it receives, but it is still expected to be falling apart in a few decades. Lenders will not issue a mortgage longer than the mobile home’s expected remaining years. If you buy a 10 year old mobile home, you may be able to get a 10, 20 or 25 year mortgage based on its current condition. The mortgage must end before the mobile home is considered ready to dispose.
The mobile home can sit on land you own, land you have a mortgage for, or a freehold/condo. If the mobile home will be in a freehold/condo, 50% of the condo association dues will be factored into the debt servicing ratio to determine if you qualify for the mortgage. Take the time to read the condo association rules, too, since you don’t want to agree to live somewhere if you cannot abide by their regulations.
It is possible to find mortgage lenders that allow you to finance a mobile home and land for one with only 5% down, but these can be hard to find. Consult with team Whalen Mortgages your trusted Grande Prairie mortgage brokers to find a mortgage lender that will charge you a reasonable interest rate. You may also find a mortgage lender through a broker that lets you buy the land and the mobile home separately before combining them into a single, affordable loan. This is an excellent option if you’re already making payments on the land and then buying the mobile home you’ve always dreamed of. 780-357-3993.