Current Mortgage Rates for Mobile Home Loans in 2023

Buying a mobile home can be an affordable way to own your own place. Mobile homes often cost significantly less than traditional site-built homes. However, getting financing for a mobile home is different than getting a traditional mortgage. In this article, we’ll look at current mortgage rates for mobile home loans and tips for getting the best rate.

What Are Current Mortgage Rates for Mobile Home Loans?

Mortgage rates for mobile homes are often slightly higher than rates for traditional mortgages on site-built homes Here are some examples of current average interest rates for mobile home loans

• New mobile home loans: 6% to 8%
• Used mobile home loans: 8% to 12%
• FHA mobile home loans: 5% to 7%
• VA mobile home loans: Around 6%
• USDA mobile home loans: Around 5.5%

Rates can vary significantly depending on your credit score, down payment amount, and other factors Government-backed mortgages like FHA, VA, and USDA loans tend to have lower interest rates than conventional mobile home loans

What Affects Your Mobile Home Mortgage Rate?

Several factors determine the mortgage rate lenders will offer you for a mobile home loan:

Credit score: The higher your credit score, the lower your interest rate will be. Borrowers with scores below 620 may have trouble getting approved.

Down payment: The larger your down payment, the better your rate. Most lenders require at least 10% down for a mobile home.

Debt-to-income ratio: Lenders look at your total monthly debts versus monthly income. Keep this below 40% for the best rates.

Loan term: Shorter loan terms (like 15 years) have lower rates than longer terms (like 30 years).

New versus used home: New manufactured homes qualify for better rates than used mobile homes.

Land ownership: Owning the land your home sits on leads to better rates than leased land.

Loan type: Government-backed loans often have lower interest rates than conventional loans.

Credit history: A strong history of on-time payments leads to better pricing. Collections or late payments can increase rates.

Tips for Getting the Best Mobile Home Mortgage Rate

If you want the lowest interest rate on your mobile home loan, here are some tips:

• Shop around: Get rate quotes from multiple lenders to find the best deal. Online lenders like Vanderbilt and College Ave offer easy rate comparisons.

• Improve your credit: Pay down debts and dispute any errors to boost your credit scores before applying. Wait to apply if you’ve had recent late payments.

• Save for a down payment: Putting 10% or 20% down can mean a much lower rate. Some lenders even offer low down payment options like 3.5% down.

• Lower your DTI: Pay off credit cards and other debts to keep your debt-to-income ratio below 40%.

• Consider FHA, VA or USDA loans: These government-backed loans offer competitive interest rates even for borrowers with lower credit scores or down payments.

• Buy new: New manufactured homes often qualify for better pricing than used mobile homes.

• Choose a shorter term: Opt for a 15-year loan term instead of 30 years to get a lower rate.

• Own your land: Land ownership provides more favorable pricing than leased land.

• Add a co-signer: Adding a co-signer with strong credit may help you qualify for a lower rate.

Borrowers With Lower Credit Scores Can Still Get Financing

Don’t let bad credit deter you from pursuing mobile home financing. Many lenders work with borrowers whose credit scores fall between 500 and 640. You’ll pay higher interest rates than borrowers with top tier credit, but can still get approved.

Consider using an FHA, VA, or USDA loan. These programs are more flexible on credit requirements than conventional loans. Your down payment requirement will also be lower, usually between 0% to 3.5%.

Look for lenders like 21st Mortgage, Vanderbilt Mortgage, and Nations Lending that specifically work with buyers who have less-than-perfect credit. An experienced lender can help you understand what rates and loans you may qualify for.

Before applying, take steps to improve your credit score like paying down balances and removing errors on your credit reports. A score of 640 or higher will open up better mortgage opportunities.

Choosing Between New and Used Mobile Home Loans

New manufactured homes tend to have lower interest rates than used mobile homes. Lenders view new homes as less risky investments.

According to data from the U.S. Census Bureau, the average interest rate for new mobile homes was around 6% as of July 2021. The average rate for used mobile homes was around 8.4%.

New homes also depreciate in value slower than used homes. This makes it easier to build equity and qualify for better loan terms.

That said, used mobile homes can also be smart buys. Opting for a used home costs less upfront. You can get more square footage for your money.

Carefully compare costs of new versus used mobile homes. Include the interest rate, loan fees, down payment, insurance, lot fees, and repairs. Crunch the numbers to see if new or used provides more value based on your budget and goals.

Understanding Land Ownership Requirements

Most mobile home lenders require you to own the land your home sits on. Land ownership provides the lender with greater security in case of default.

If you want to place your mobile home in a community where you rent the land, look for lenders like Palm Harbor Homes, 21st Mortgage, and Mortgage Research Center that offer loans even if you don’t own the land.

Interest rates tend to be higher when you rent land instead of owning it. You’ll also likely need to make a larger down payment. Expect rates around 8-10% for leased land.

Before applying for a mobile home loan, make sure the community you want to live in qualifies for financing. Some mobile home parks have restrictions. Ask prospective lenders if they’ve financed homes there before.

If possible, work towards eventually owning your land. Over time, this opens up better refinance opportunities to secure lower interest rates.

Comparing Mortgage Options for Mobile Homes

You’ll come across a few different mortgage programs when financing a mobile home. Here’s an overview of some common options along with their pros and cons:

Conventional loans

• Lower credit score requirements (620-640 scores)
• 10-20% down payment required
• Can be used for new or used mobile homes

FHA loans

• Available with credit scores as low as 580
• Lower 3.5% down payment
• Limited to owner-occupied primary residence

VA loans

• No down payment for qualified veterans
• No maximum loan limits
• Must be owner-occupied

USDA loans

• 100% financing available (no down payment)
• Below average interest rates
• Property must be in eligible rural location

Manufactured home loans

• Offered directly through home manufacturers
• More flexible credit requirements
• Limited to specific brands of new homes

Personal loans

• Higher interest rates than mortgages
• No home ownership required
• Shorter repayment terms

Consider which mortgage best suits your financial situation and mobile home purchase goals. I recommend looking at both conventional and government-backed loan programs to find the most competitive rate for which you qualify.

Final Thoughts on Current Mobile Home Mortgage Rates

Mobile home loans offer a way to finance a manufactured or modular home at lower costs than site-built homes. Interest rates are influenced by your credit score, down payment, debt levels, and other factors.

Current mortgage rates for mobile homes generally fall around 6% for new homes and 8% for used homes. Borrowers with great credit (scores above 740) can potentially get even lower rates.

Government-backed mortgages like FHA, VA and USDA loans feature competitive interest rates and more flexible credit requirements. I recommend shopping around with multiple lenders to secure the lowest rate and best loan program for your situation. Carefully compare costs of new versus used mobile homes too.

Even buyers with less than perfect credit still have mobile home financing options. Taking steps to improve your credit and employment history can help boost your chances of approval for a favorable mortgage rate. Partnering with an experienced mobile home lender simplifies the process of getting affordable financing.