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Chattel Loans for Mobile or Manufactured Homes Explained

A blue manufactured home financed with a chattel loan

What is a chattel loan: a 2023 guide to the unique qualities of this loan for mobile or manufactured homes

If you’ve never heard the term "chattel", don’t feel bad. Most people are not familiar with this word, which means “personal property that is movable in nature, not attached to the land.” A manufactured or mobile home that rests on wheels or a chassis and can be moved to different locations is a perfect example of chattel. So are vehicles, airplanes, and equipment like tractors and bulldozers.

Where a traditional loan or mortgage involves the purchase of real property (land), a chattel loan only deals with movable personal property. Therefore, when someone is interested in buying a mobile home, a chattel loan can be a very good option.

If you’re in the market to buy a manufactured or mobile home, this guide can help explain what makes a chattel loan special for this kind of purchase.

 A blue manufactured home with a front porch financed with a chattel loan

What are the benefits and drawbacks of a chattel loan?

Although chattel loans have a similar structure to conventional mortgages, including regular monthly payments, chattel loans offer some unique benefits because land is not tied to the loan. These benefits may include faster processing time, comparable interest rates, shorter repayment terms, and lower down payment. Another great benefit is lower processing fees, such as no title search, title commitment, or full appraisal which can save you money that you can put towards a down payment. However, 21st Mortgage does offer 0% down for qualified buyers.

There are a few things to consider before opting for a chattel loan, however. First, because chattel loans only apply to movable personal property, it cannot include any funding for the property or real estate where you may wish to place your mobile home. You will need to either acquire a lease, purchase the land separately, or already own the land.

Finally, as with any loan, it is important to make your full payments on time. Traditional loans use real estate as collateral to secure the loan. A chattel loan is secured with personal property, such as a mobile home or vehicle itself. As with a traditional mortgage, you will still own the financed property, but your lender will be reflected as the lien holder on the certificate of title or other public record. It’s important that you choose a lender you can trust and that you feel comfortable with their explanations of the payment process and details.

How do I qualify for a chattel loan?

No matter what kind of mobile or manufactured home loan you’re looking for, the first thing to consider is whether you can afford a loan at this time. This payment estimator can help you determine what you can afford and what different monthly payment options are available to you.

In general, manufactured home chattel loan requirements include good financial standing with a minimum FICO credit score of 575. You should have no repossessions or collections accounts in recent months. Depending on where you purchase your home, the minimum amount for most chattel mobile home loans is $16,000.

A manufactured home with a front and side porch financed with a chattel loan

What if I don’t qualify for a chattel loan?

Chattel loan requirements differ from lender to lender. For instance, 21st Mortgage, the nation’s #1 mobile and manufactured home lender , offers “zero credit score” buyers equity loan programs with no application fee or lock in fee, but may require higher down payments (minimum of 35% in cash, trade, or land equity).

A mobile home financed with a chattel loan

Could a chattel loan be right for you?

Purchasing a manufactured or mobile home can be an excellent decision, especially for those who are tired of high rent payments, are entering homeownership for the first time, or like the option of being able to move their home as their needs and desires change. Ask 21st Mortgage about the option of a chattel loan. 21st Mortgage can work with you to find the right loan for you. In fact, we offer 0% down for qualified buyers! We’re here to help. Now may be the right time to build value with a mobile home you’ll enjoy for years to come.

Questions? Contact us at 800-955-0021.

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