Everything You Need to Know About Getting Mobile Home Loans in Arizona

Mobile and manufactured homes are an affordable housing option that’s growing in popularity across Arizona With quick move-in ready homes and financing that can close in as little as 30 days, it’s easy to see the appeal. However, securing financing for a mobile or manufactured home does come with some key differences from a typical mortgage

In this comprehensive guide we’ll break down how mobile home loans work types of loans available, tips for qualifying, down payment options, and the step-by-step process to purchase and finance a mobile home in Arizona. Whether you’re looking to buy new or used, this info will help you navigate the loan process.

Overview of Mobile Home Loans

Mobile home loans, also called chattel loans, are a specialized type of financing used solely to purchase the home itself – not any land or property. These loans have faster approvals, lower down payments, and simplified closing processes compared to conventional mortgages.

With a mobile home loan

• You can qualify with credit scores as low as 580
• Down payments start around just 3%
• Loan terms up to 30 years are available
• Interest rates are competitive, often between 5-10%

When you own the mobile home and land separately, chattel loans give you affordable financing focused just on the purchase price of the home.

Types of Mobile Home Loans

You have several options when it comes to lenders and loan programs for financing mobile homes in Arizona:

Banks – Large banks like Chase and Wells Fargo offer chattel loans and can provide the convenience of one-stop-shopping for all your banking needs. However, approval may be tougher.

Credit unions – Credit unions like Desert Financial or Arizona Federal often have better rates and fees compared to banks. Membership is required to join.

Online lenders – Companies like Riverstone Residential and 21st Mortgage provide loans online across Arizona. This can be a fast and easy option directly through their website.

Mortgage brokers – Brokers like Cascade Loans have relationships with multiple lenders and can help you find and compare personalized loan offers. Their expertise can simplify the process.

Make sure to shop around multiple lenders to get rate quotes. Comparing loan estimates helps ensure you get the best deal.

Tips for Qualifying for a Mobile Home Loan in Arizona

Though mobile home loans are easier to get than mortgages, you still need to meet credit, income, and down payment requirements to qualify and get decent rates:

• Credit score – Scores of 580 and above have the best approval odds and rates. Scores below 550 make approval very tough.

• Down payment – Expect around 3-5% down for new homes and 5-10% for used. Savings, gifts, grants, or seller contributions can help cover this.

• Income – Most lenders want income equal to 3x the monthly payments. Provide pay stubs, tax returns, and bank statements as proof.

• Lower debt – Keep credit card balances below 30% of limits and pay down installment loans and collections to improve your debt-to-income ratio.

Meeting these criteria gives you the strongest shot at affordable loan approval. Your loan officer can advise if you need help strengthening your financial profile.

Low Down Payment Options for Mobile Home Loans

Coming up with even a small down payment can be a challenge. Here are some options for low down payment mobile home loans in Arizona:

• FHA loans – Offered through private lenders, FHA loans only need 3.5% down and have flexible credit and income standards.

• VA loans – For veterans, VA loans provide 100% financing with no down payment required. Surviving spouses may also qualify.

• Seller credit – Ask the seller to provide a credit for 3-5% of the purchase price to cover your down payment at closing.

• Grants and assistance – Check if homebuyer grants through state, city, or nonprofit programs are available. These provide funds that don’t need to be repaid.

• Gifts – Receive gifts from relatives for your down payment. Lenders usually require a gift letter stating the money doesn’t need to be repaid.

With the right loan program and some creativity, you can get financing with minimal cash out of pocket.

What’s the Process for Buying a Mobile Home with Financing in Arizona?

Once you find the ideal mobile or manufactured home, follow these key steps to purchase with a chattel loan:

1. Get pre-qualified – A lender will review your income, assets, debts, and credit to issue a pre-qualification letter showing the loan amount and rate you qualify for.

2. Select your home – With financing pre-approval in hand, you can confidently shop for the mobile home model that fits your needs and budget.

3. Apply for financing – Submit a full loan application with income documentation and pay for appraisal of the home. Get homeowners insurance quotes.

4. Complete inspections – The lender will likely require a structural and mechanical inspection of the used mobile home by a certified inspector.

5. Underwriting – The lender will verify all your financial information and issue final loan approval a few days before closing.

6. Final walkthrough – Do a final walkthrough of the home just before closing to ensure no damage or issues.

7. Closing – Sign all your loan documents and pay your down payment and fees. Then get the keys!

The entire process typically takes 30-45 days from application to funding. Streamline the process by having all needed documents ready.

What Do You Need to Buy and Finance a Mobile Home?

Purchasing and financing a mobile home requires some key documentation. Being prepared with these items makes the loan process much smoother:

• Down payment – 3-10% of the purchase price based on your loan program. Have proof of funds.

• Income verification – Pay stubs, W-2s, tax returns, bank statements proving your income.

• ID – Driver’s license or other government-issued ID for all applicants.

• Home insurance – Quote for insurance on the mobile home. It’s required to close.

• Credit reports – Most lenders will pull your reports, but be ready if they ask for copies.

• Debt info – Account numbers, balances, and payment amounts for all open loans and credit cards.

Having these items ready cuts down on paperwork headaches so you can close on time. Ask your loan officer for any other unique documents needed.

Pros and Cons of Mobile Home Loans

Mobile home loans make buying affordable and quick, but also have some drawbacks:

Pros

• Lower down payments, often as low as 3%
• Available with lower credit scores starting at 580
• Very fast approvals and closing times around 30 days
• Potentially lower rates than conventional mortgages
• Purchase just the home now, land later

Cons

• Limited loan amounts up to $150K typically
• Higher interest rates than mortgages
• Home depreciates over time unlike site built homes
• Loans don’t cover land purchase
• Difficulty securing financing in the future

While not perfect, the pros often outweigh the cons for Arizona buyers wanting an affordable option without big down payment requirements.

Alternatives to Finance a Mobile Home Purchase

Though mobile home loans are the most common financing method, also consider:

Conventional mortgages – If buying the home and land together, you may qualify for a traditional mortgage which features lower rates and more loan amount flexibility. You’ll need better credit and income however.

Personal loans – Unsecured personal loans with terms up to 7 years provide a lump sum you repay monthly. However, maximum loan amounts are usually under $50,000.

401(k) loan – Borrow against your 401(k) balance. While you avoid credit checks, you lose investment returns in the borrowed amount.

Home equity loan – If you have sufficient equity in another property, a home equity loan or line of credit is an option. But it puts your property at risk.

Family loan – Asking relatives for financing may provide easier terms. Define specifics like interest and payback in writing.

These alternatives each have pros and cons to weigh, but a mobile home specific loan is often best.

Key Takeaways on Buying and Financing a Mobile Home in Arizona

Finding the right home within your budget is an important first step. But determining how you’ll pay for it is just as critical.

With their speed, lower down payments, and flexible credit requirements, mobile home loans allow Arizona buyers to purchase without many of the hurdles of conventional financing. But make sure to shop multiple lenders and loans to get the lowest rates and fees.

Understanding eligibility, documents needed, and the step-by-step process ensures you can complete financing smoothly. With the right preparation, you’ll be moving into your brand new mobile home in as little as 30 days!