Can you refinance a mobile home loan? Short answer: yes. However, there are some unique considerations on that “yes.”
Refinancing a manufactured or mobile home loan is similar to refinancing a traditional single-family home. But—no matter what sort of property you own, the benefits of refinancing are the same:
- Adjust your loan terms
- Lower your monthly payments
- Tap into your home equity
This guide outlines the process, requirements, and considerations for refinancing a mobile or manufactured home. Here’s what you need to know.
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Can you refinance a mobile home loan?
As mentioned above, owners of mobile or manufactured homes can apply to refinance their loans.
Common refinancing options typically come in one of two forms:
- Rate-and-term refinances: For securing a lower interest rate or modifying the terms of your loan, such as shortening or extending the loan term.
- Cash-out refinances: Borrowing against the equity in your home to access cash for large expenses like:
- Home improvements
- Debt consolidation
- Other financial goals
Refinancing a mobile or manufactured home requires different considerations than refinancing a traditional mortgage loan; however, homeowners can still benefit from these options.
Working with a knowledgeable loan officer can help you evaluate whether refinancing is a practical solution for your financial needs.
What is the difference between a mobile and a manufactured home?
Understanding the distinction between mobile and manufactured homes is essential when considering refinancing. The difference lies in the construction date:
- Mobile homes: These are factory-built homes constructed before June 15, 1976.
- Manufactured homes: These homes were factory-built after June 15, 1976, when the U.S. Department of Housing and Urban Development (HUD) introduced specific safety and construction standards.
The date of construction can influence your eligibility for certain loans, as manufactured homes built after HUD standards must often meet additional lender requirements.
How to refinance your mobile home: Steps and requirements
Refinancing a mobile or manufactured home involves several steps and considerations to achieve your goal.
1. Choose your lender
Because financing mobile and manufactured homes differs from traditional mortgages, discussing refinancing options with your current lender is a good starting point.
If you opt to switch lenders, be aware that many lenders require the home to be affixed to land that you own. This may be an obstacle for those who own their mobile home but rent the lot it sits on, usually in a park designated for mobile and manufactured homes.
The upside to this requirement is it turns the house into what’s considered “real property,” which expands your refinancing options.
Other lender requirements might include a minimum square footage or foundation type to qualify for certain mobile home refinance programs.
2. Choose your refinance program
Your home’s classification and your specific circumstances dictate which programs are available to you. The best refinance option depends on your financial situation, credit score, and property type.
The primary refinance options available for mobile homes include:
Conventional Refinance
- Pros: Common loan type, potential for lower fees
- Cons: Often requires higher credit scores and more stringent qualification criteria
FHA Streamline Refinance
- Pros: Quicker and more affordable process for existing FHA borrowers
- Cons: Requires HUD-approved home, potential for higher mortgage insurance premiums
VA Streamline Refinance (also known as an IRRRL):
- Pros: Simplified process for VA loan holders, fewer documentation requirements
- Cons: Limited to VA-eligible borrowers
USDA Streamline Refinance:
- Pros: Simplified process for existing USDA borrowers, potential for lower interest rates
- Cons: Limited to rural properties eligible for USDA programs
3. Apply for the refinance
Once you’ve selected a loan program, you can complete your refinance application. Be prepared to provide documentation, including:
- Proof of income (e.g., pay stubs, tax returns)
- Proof of assets (e.g., bank statements, investment accounts)
- Identification (e.g., driver’s license, Social Security card)
- Tax forms (e.g., W-2s, 1099s)
To determine eligibility, lenders will evaluate your:
- Credit score: A minimum credit score between 580 and 620 is usually acceptable
- Debt-to-income (DTI) ratio: A DTI under 43% is preferred by lenders
- Home equity: Refinancing a mobile home typically requires less equity than traditional
4. Pay closing costs
When calculating whether refinancing is right for you, don’t forget to include the upfront costs, such as closing fees, typically 3%–6% of the loan amount.
Closing costs include:
- Appraisal fees
- Title search fees
- Legal fees
- Mortgage discount points (if applicable)
Your lender should provide a Closing Disclosure that details all costs associated with your refinance to help you budget correctly.
Closing costs can be paid upfront or rolled into the loan, though rolling them in will increase your loan balance and, thereby, the interest you’ll pay over time.
Is refinancing your mobile home right for you?
Refinancing a mobile or manufactured home can be a smart financial move, but it depends on your individual situation.
- Consider market conditions: If rates are higher than what you currently have, it may be better to wait on the refinance
- What are your financial goals: Are you hoping to lower your payment, cash out equity for other expenses, or change your loan terms?
- Remember closing costs: Calculate the cost of refinancing and your break-even point. If refinancing costs more than it will save you, it might not be the right option.
- Ensure you have enough equity: Cashing out your equity typically results in a higher monthly payment. Make sure you have enough equity in the mobile home to make it taking it out worth it.
Ready to refinance your mobile or manufactured home? Connect with MyPerfectMortgage.com
If refinancing sounds like the right option for you, MyPerfectMortgage.com can connect you to an experienced lender specializing in mobile home refinancing.
The best lenders can guide you through the process, explore your options, and help you secure the best financing for your needs.
Visit MyPerfectMortgage.com to find the ideal mortgage solution for you.Our advise is based on experience in the mortgage industry and we are dedicated to helping you achieve your goal of owning a home. We may receive compensation from partner banks when you view mortgage rates listed on our website.
