Red Deer Mobile Home Mortgages
Mobile homes are any mobile often called trailer home you want to purchase with land. In this case, we’re going to limit the discussion to mobile homes that you could in theory load up on a truck and take somewhere else. This is why mobile home mortgages have a number of differences from conventional mortgages.
In order to secure a mortgage on a mobile home (assuming you have good credit), there are two conditions that need to be met:
- The mobile home is permanently affixed to the land.
- The remaining economic life of the mobile home isn’t shorter than the mortgage amortization.
The mobile home’s attachment to the land is verified by a tie down report. The appraiser will record property’s CSA number. They will then verify that the mobile home is secured by anchors or welded to pilings. The same inspector will estimate the remaining economic life of the trailer.
A brand new mobile home will have an economic life of 35 to 40 years. Unlike a home, a trailer will depreciate with time because it is expected to be falling apart by the end of its economic life. The mortgage lender is losing money if they repossess a property where the trailer is worth nothing. The mobile home lender’s mortgage term will depend on the expected remaining life of the trailer. If the trailer is already ten to fifteen years old, the remaining economic life must be at least as long as the loan term. This often means you have to go for a ten, fifteen or twenty year mortgage instead of a thirty year mortgage when buying a used trailer. Unless significant upgrades have been completed to increase the remaining economic life.
The land the mobile home sits on could be a freehold or a condo. If the mobile home is sitting on a bare land condo, there will be condo fees. Fifty percent of the condo association fees will be included in the debt servicing ratios when determining whether or not you qualify for a mortgage. Read the condo association rules carefully, since you have to abide by them in order to live there.
You can finance mobile homes with a 5% down payment if it will be your primary residence. Consult with the team at Whalen Mortgages your trusted Red Deer mortgage brokers, since many mortgage lenders won’t deal with mobile homes, while others charge high interest rates to offset the perceived risk, we can find you the lowest interest rate and get your mobile approved. We also have a lender who is willing to finance land and mobile home purchases separately, giving you the option to purchase land and a mobile as a construction draw mortgage. Call Red Deer Whalen Mortgages today to get started 587-315-3525.