The Top 4 Reasons to Refinance Mobile Homes

Mobile Home Mortgage

Manufactured Home Loan

Mobile Home Refinance

There are plenty of good reasons to refinance. I will explain some of the most common reasons and also provide some useful advice on what you need to consider before refinancing your mobile home.

First off, here are the Top Four Reasons to refinance your Mobile Home:

1) To lower your monthly payments and/or interest rate

2) For the stability of a fixed rate loan

3) To access home equity, or "pull cash out" for improvements, retirement, family, etc.

4) And lastly, to consolidate your debt/pay off credit cards.

Now, let´s go into detail with each of these top four refinance reasons. The most popular reason behind refinancing a mobile home or manufactured home is to lower your current mortgage interest rate and monthly mortgage payment. Now this may seem simple; who doesn't want lower payments? But even if you are currently in a situation where you can easily afford your monthly payments, refinancing your mobile home loan with a lower interest rate may allow you to shorten the length of your loan, pay it off sooner, and make additional payments towards the principal balance of your loan from time to time, if you so desire, to pay the loan off even sooner. This could save you loads of money on interest, over the remaining term of your loan.

The second reason for refinancing your mobile home mortgage is to obtain a fixed interest rate and eliminate the costly adjustable rate feature of your existing loan. Sure, an adjustable rate mortgage is a good way to purchase a mobile home with low initial monthly payments, however, the sporadic rate fluctuations and the potential for large interest rate jumps can be not only alarming, but very costly. This is why many homeowners consider refinancing into a fixed interest rate loan.

Thirdly, accessing the equity in one´s mobile home is yet another popular reason for refinancing. Perhaps you are in need of some cash to pay for your children or grandchildren's college tuition, or you are looking to make some home improvements to maintain the value of your home. Planning for retirement is another common reason to tap into the equity you have built up in your manufactured home.

Now let´s review another important reason that mobile home owners have for refinancing; consolidating debt, paying off high interest rate credit cards and auto loans. Taking cash out of your home to pay off debts that have high interest rates and non-deductible interest costs is a very popular reason behind refinancing mobile home and manufactured home loans. The interest on your mobile home loan is, typically, tax-deductible. If you have a considerable amount of credit card and auto loan debt, it can make sense to use some of the equity in your home to pay off these costly amounts. After paying these debts off with a manufactured home loan, the interest you pay on your new mobile home loan is now tax-deductible. Now, keep in mind, it is always advisable to seek advice from your tax advisor about your particular tax situation.

Let´s talk about another important factor when considering a mobile home refinance; costs. Some mobile home lenders now offer low flat rate fees, if you are looking to refinance with the lowest expenses possible. Most borrowers have the option to pay any fees associated with refinancing up front while closing their loan, however one may also be able to include these fees into the new loan amount and keep out of pocket expenses at a bare minimum. Just like a traditional home loan, borrowers can also "buy down" the interest rate. To do this, borrowers may be charged with "points". Points are additional fees that are paid at the time of closing to the lender that is financing your new manufactured home loan. Usually a point is considered one percent of the new loan amount.

Knowledgeable lenders that are licensed to do mobile and manufactured home loans should be able to help you decide whether the cost of the loan is worth the savings. You will want to carefully consider all of your options first with a qualified professional mobile home and manufactured home lender.