Getting The Best Interest Rate On Mobile Home Equity Loans
July 8th, 2010
In order to be the annuitant of the best home Mobile Home Equity loans your mobile home should be sitting on fee simple land you own. This land could be in a mobile home park or not. Owning both the mobile home and the land will get you the best interest rate and terms from any lender who deals in financing mobile homes. The other option being your mobile home sits in a mobile home park where the space is rented or leased. Ergo when applying for mobile home equity loans the only security the lender will have is your mobile home, your good credit history, the age of the mobile home and that smile on your face promising to make all the home equity payments as prescribed. The lender risk is greater without the land.
Mobile home equity loans are generally the avenue a borrower takes when they need some extra cash for whatever reasons. Could be to upgrade the mobile home which will make the lender happy, buy a new car, take a trip or pay off credit cards. When you decide to tap into some of the existing equity in your home please notice the operative word: some. You’re not going to get all of your equity. All lenders, with the possible exception of a private hard money lender who will charge you 14 percent interest, will make their decision based on a loan-to-value ratio. They also take into consideration the age of your mobile home. Many lenders tend to shy away from handing out much money if the mobile home is a pre-1976 model and a single wide.
This loan-to-value example will help you understand the process. Mobile home value is $100,000. Your existing 1st mortgage is $30,000 leaving you with $70,000 in paper equity. The cash your lender can safely lend and still sleep at night would be a combination of the first mortgage and the mobile home equity loan which will become a new lien on your property. This combination, in most cases, will not exceed 65 percent to 75 percent of the homes value. You can do the math to see how much cash you can stick in your pocket.
Most mobile home equity loans lenders terms will be up to 15 years and between 7 percent and 9 percent interest based on the fact that your lender is in second position behind the first and taking the risk. Something to keep in mind when applying for a home equity loan is that all the banks and credit companies are vying for your business. You can use this to your advantage to get the bet possible rates. Using the internet is a great way to find the best rates, this is due to the fact that you can do all your research quickly and without having to actually visit the lenders in person. This is a great time and money saver, companies that want your business will often advertise on the internet to get you to their websites. This is a great way to see what rates they are offering and to compare them against their competition.
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