mobile home financing

[Gerri Moniz]

Can anyone please tell me why it's so hard to get refinancing for a MH in the state of RI? I own my single wide home and the land. I got a mortgage when I purchased this 1996 fleetwood home(new) so I've had it for 8 yrs. The rate is 8.75 so I wanted to get a better rate. My credit is excellent (7+) I tried applying on this web site but I don't get any replies. The co. in my state only offer the sme rate, if they do it at all. Any help would be appreciated.

[rmurray]

The only type of loan that would have a lower rate would be a traditional home mortgage..unfortunately most mortgage companies do not consider single section homes as something they will mortgage....but..there still are some....

FHA title 2 finance will do a single section home and land if the home is set to the FHA specs...rates at this time for 15 year mortgages is about 5 3/4%...but there are substantial closing costs on a FHA loan...(6 1/4% for 30 years)..

The problem you have though is that you have a very small loan for a mortgage...originators make commission as a percentage of the loan...you kind of loan would be huge work..and very low commssion...most originators would not want to spend the time and effort to do this small loan..

the other thing is...for you it might not make a lot of sense....closing costs for this size loan could easily be 10% or more...That would mean you would be at least 5..maybe 6 years before you realize any savings...Only you can judge...

Check with smaller mortgage brokers who specialize in FHA in your area..Good luck..

[Bill Norcross]

Howdy Gerri. We specialize in manufactured-home-only financing nationwide (chattel mortgages), and our experience mirrors yours.

By the way, are you saying you want a home-only loan, or a land-home package? I wasn't clear from the post. R Murray is a real pro, and he's right (as usual), FHA is your bet for a land-home package, and it is hard to find lenders to do the smaller loans.

The best quotes from our lenders are running about 8.250% for chattel loans (no land in the deal) without buying down. You can add the buydown to the loan if loan-to-value (LTV) can handle it, or pay out of pocket.

So, a significantly lower rate is not in the cards without buying down, or getting a 7-year term (which will likely increase your payment).

If your real goal is to lower your payment, then refinancing could make some sense, maybe.

If your goal is to pay less interest and/or pay off the loan sooner, and you can't find an FHA-approved lender (and if you find one, please email me who it is), I would recommend you simply make monthly or annual prepayments. If you have the extra dough, this saves a huge amount of interest, and gets you paid off much sooner, without the costs of refinancing for a negligible rate decrease.

What is your main goal? Best. Bill.