If your mortgage business includes deals in smaller towns and rural properties, you’ll likely need to be familiar with the unique challenges of mobile home financing. It’s not difficult, but it is different.
Here are a few questions to ask:
Is the mobile home in a mobile home park, or on land owned by the borrower?
We have access to lenders who will consider mobile homes on rented pads as well as on owned land.
Have there been additions to the mobile home?
This is a big one. If there have been additions that include any alteration/addition to the electrical system, lenders will want to make sure these have been done with a permit. Ask your borrower up front if they have permit documentation. If it was done without a permit, you may expect lenders to require a permit and approval before advancing funds. In British Columbia, the property cannot be listed for sale until the additional electrical work has been inspected and approved. However, if the mobile home’s electrical system is untouched from the factory and the CSA sticker is still attached, then there shouldn’t be a problem.
What is the age of the mobile home?
Since mobile homes depreciate in value more quickly than regular construction, lenders will likely limit the age of the mobile home that they will be prepared to take as security. This will often be 15 years old or newer.
Amortization periods will likely be shorter
. This is due again to the fact that mobile homes depreciate in value faster than their stick frame counterparts. Lenders will offer shorter amortizations periods and this in turn will lead to higher monthly payments.
Purchase financing for a new mobile home can be tricky
. Many manufacturers want to be paid in full before the home leaves the factory. On the other hand, lenders don’t want to fund a loan until the mobile home is on the land. Kokanee has successfully funded many mobile home purchases with our unique systems.
If you’re working with a borrower in need of financing for a mobile home, the underwriting team at Kokanee Mortgage is ready to help find simplified solutions to these unique challenges.