How A Mobile Home Refinance Works

Getting a mortgage for a mobile or manufactured home can involve a different set of steps compared to getting a mortgage on a traditional single-family home. There are specific requirements for these types of properties that many lenders have before they’ll give you a mortgage. That goes for refinancing, too.

A mobile home refinance might be right for you if you want to adjust your loan terms, lower your monthly mortgage payments or borrow money against the equity in your home. Beyond your reason for refinancing, you’ll also want to consider the different requirements, pros and cons. 

We’ll go over the basics of what kinds of mobile and manufactured homes can be refinanced, what loans are available, and what you need to do to refinance. But first, it’s important to understand that a mobile home and a manufactured home, though similar, are not the same things.

What’s The Difference Between A Mobile Vs. Manufactured Home?

Let’s go over the difference between mobile and manufactured homes. Technically, the difference lies in the date when they were built. A factory-built home built prior to June 15, 1976, is a mobile home, whereas it’s a manufactured home if it was built after this date. This is because the Department of Housing and Urban Development (HUD) implemented construction and safety standards that year for this type of home.

Can You Refinance Loan For A Mobile Home?

Borrowers who own a mobile home or manufactured home have the ability to refinance their mobile home loan. You may choose a rate-and-term refinance to get a better interest rate or do a cash-out refinance to pull money out of your home equity.

One of the factors that makes these types of homes appealing is their affordability. This can also make them good candidates for refinancing. Work with your lender to determine if a mobile or manufactured home loan refinance is a viable option for you.

Manufactured Home Mortgage Refinancing Requirements

There are a few requirements you’ll need to meet to refinance your mobile or manufactured home. One major requirement for a mortgage is for the manufactured home to be on a permanent foundation. Manufactured homes that aren’t on a permanent foundation are considered chattel property or personal property, and you’ll have fewer loan options. You also can’t lease the land from a mobile home park – you must own it.

Borrowers also need the right credit score for the refinance they’re applying for. For most loans, the minimum credit score required is 580 – 620. On top of that, you’ll need to have a qualifying DTI. While DTI requirements vary, lower than 43% is a good starting point.

Understanding The Basics of Mobile Home Ownership

Before you start the process of mobile home refinance, you should understand the different types of ownership.

Mobile Home Ownership Types

Mobile home ownership is a little more complicated than ownership of a traditional home. With a traditional home, you own the land and the structure (dwelling) on the land. This can also be true with mobile homes, but not always. Mobile home ownership always pertains to the dwelling but may or may not include the land that the mobile home or manufactured home sits on.

Real Property Vs. Personal Property

Another important fact to know when you’re considering a mobile home refinance is that mobile homes and manufactured homes are classified as either real property or personal property. Real property refers to land and anything attached to it. Personal property, on the other hand, refers to anything that can be moved. Why is this important? Because you can't refinance a home that is considered personal property, but you can refinance a home that is considered real property. How can you tell if your home is real property or personal property? Manufactured homes are typically attached to the foundation, but mobile homes are not, so that’s a good place to start. Find out which category your mobile home is under, as this will significantly impact your financing options.