Financing has been a challenge for some looking to purchase a manufactured home, especially if it is a used home. There are nearly no traditional banks that lend on mobile homes, unless the home is attached to the land as real property. Sometimes smaller institutions or smaller local banks will lend for mobile homes, but more often than not you will need to find a bank that specializes in mobile home lending.

There are a number of lenders that specialize in this sort of lending practice. 21stMortgage, Vanderbilt, Triad Financial, Cascade and AutoMHatic Financial are some of the main lenders. Even though it is easy to get approved for a Chattel loan and the low down payment and term is very favorable for borrowers, many are left in shock at the interest rates that come with these types of loans. A borrower can expect a rate of 9%-14%depending on credit factors. However, at South Central Homes we have always encouraged our customers to make extra monthly payments towards their note to help reduce the interest cost in the long run.

Why are the rates so much higher than traditional loans? There is more risk for the lender when dealing with a mobile home. Homes are much easier to move and relocate. If a borrower were to move their home without notifying the bank. The lender would have a hard time not only finding their asset(Home) but also collecting their monthly payments and capital they lended out.

Here is one scenario on how to deal with higher interest rates. On a used home with a loan amount of $35,000 for 25 years at a 12% rate, if the borrower were to pay an extra$100 each month. They would save $45,882.85 in interest and have their note paid off in11 years 8 months. That’s a GREAT savings! As the owner at South Central Homes I want our customers to not only get a home, but I also don’t want them to be burdened with debt. The rates are high for Chattel loans, yes, but they can be beaten with discipline and some guidance and education from a good dealer like South Central Homes.