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06/01/2024

Can You Refinance a Mobile Home or Manufactured Home?


Neatly maintained mobile home with a modern exterior, showcasing potential for refinance opportunities.

The best mortgage for your situation isn’t always the one you currently have. In fact, there are plenty of reasons and circumstances where it makes sense to refinance your home mortgage. Refinancing your loan could help you get a better interest rate, take advantage of your home’s equity, or lower your monthly payment. While refinancing for traditional housing is not uncommon, mobile and manufactured homeowners often wonder whether refinancing is possible for their properties or don’t know the process to refinance a mobile home. In this guide, we’ll break down the answers to these questions and more.

What is home refinancing?

Home refinancing involves taking out a new mortgage to replace and pay off the current mortgage, often with better rates or other benefits.

Let’s start with an example:

  • Say that you have a mortgage of $250,000.
  • The 30-year fixed interest rate for that mortgage is 7.5%.
  • You know you can get another mortgage from a different lender with an interest rate of 7.2%.

If your mortgage had an interest rate of 7.2%, you would pay less for the loan over its total term since the remaining balance would accumulate less interest each month.

How do you get that lower rate? By refinancing your home loan:

  • You take out a new mortgage worth the remaining balance of your current loan with your new lender.
  • Then you pay off your old mortgage with the new one.

At the end of the process, you have a mortgage with the same $250,000 balance remaining, but you only pay 7.2% interest each billing cycle.

Modern mobile home in a vast, open field under a blue sky, exemplifying a prime candidate for refinancing.

Can you refinance a mobile home?

To many homeowners, refinancing their mortgages sounds like a smart choice. So, is it possible to do this with a mobile or manufactured home?

Absolutely. Many traditional home lenders, like local banks and credit unions, as well as mobile home lenders, offer refinancing for borrowers.

What’s required to refinance a manufactured home?

To take out any loan, you must meet certain requirements. The same is true for manufactured home refinancing loans. These typically include:

  • Meeting credit score thresholds. However, mobile home refinancing is available for almost any credit score if you work with the right lender.
  • Having a low DTI or debt-to-income ratio (not having too much outstanding debt relative to your income).
  • Being able to show proof of consistent income.
  • Having a certain amount of equity. If you want a cash-out refinance for your mobile home loan, you'll need to have enough equity built up to receive a sizeable sum.

If you aren’t sure whether you meet the requirements for a mobile home refinance, speak to a friendly, knowledgeable loan officer from a lender like 21st Mortgage. They’ll be able to answer questions and help you find the right loan solution for your needs.

Reasons to refinance a manufactured home

There are many advantages to refinancing your manufactured home, especially if your current mortgage is less than stellar for one reason or another.

Get better rates and terms

As we went over in our previous example, many mobile homeowners choose to refinance so they get lower interest rates. Most mortgages take several decades to pay off, and a high interest rate can significantly add to the total amount you pay for the mortgage over the years. If you can get a mortgage with a lower rate, you could save yourself thousands of dollars over the loan’s term.

Alternatively, maybe your current loan is for a longer term than you’d like. A new mortgage lender could refinance your mobile home so its mortgage has a shorter term with the same loan amount. Both of these examples have the same result: a better loan for you.

Use your home’s equity

Many other homeowners refinance their manufactured home mortgages to take advantage of their equity.

For example, if your mobile home loan was originally worth $300,000, and you’ve paid down the principal to make it $210,000, you own $90,000 of equity.

A mobile home cash-out refinance gives you the option to spend that equity as cash. Here’s how it works:

  • You decide you want to spend a portion of that equity.
  • To do this, you take out a new mortgage from a new lender. The lender agrees to let you borrow 80% of your home’s equity, resulting in a loan worth $270,000.
  • You then use the $270,000 to pay off the $210,000 on your current mortgage, leaving you with $60,000 in “cash” from the loan’s remainder.

When a cash-out refinance concludes, you still have a mortgage that you need to pay, but you’ve effectively transferred some of your home’s equity into funds you can use on whatever you want. Cash-out refinancing can be a smart, tactical choice to pay for things like:

  • Debt payments
  • Car repairs
  • And much more

Remove someone from a loan

What if you need to remove someone from your current mortgage? Refinancing lets you do just that. If you are approved for a new loan as the only borrower, you can use that loan’s balance to pay off your current mortgage. Refinancing also allows you to do the reverse – if paying for a mortgage by yourself isn’t feasible right now, a new loan with a co-signer or another borrower could be a wise move to lighten the financial load.

A mobile home that is eligible for mobile home refinancing with a better rate.

Steps for refinancing a mobile home

Ready to start refinancing your mobile home loan? Follow these steps to find and take out the perfect mortgage for your budget and refinancing goals.

Contact a mortgage lender

Your first step to refinance your mobile home is to contact a lender. You can begin the process online or over the phone and, in some cases, complete your refinancing without an in-person visit. Some lenders will require you to visit a branch or retail location to finalize the process, but not 21st Mortgage.

Keep in mind that different lenders offer mobile home refinancing with different requirements or strings attached. As an example, some mortgage lenders require manufactured homeowners to own the land their property sits on, or they might need the manufactured home in question to be affixed to a permanent foundation.

Other lenders, like 21st Mortgage, don’t have these same limiting requirements. Do your research beforehand to make sure you work with the best lender for your unique situation.

Apply for the loan refinance

Once you’ve chosen the best refinancing opportunity for your situation, you can apply for the refinanced loan by submitting the required paperwork. This usually includes documents like:

  • Bank statements
  • Investment account statements
  • Pay stubs
  • W-2s
  • Proof of income
  • Identification
  • And more

Pay all closing costs

Before you can finalize your refinance, you’ll need to account for closing costs.

Closing costs can include ancillary fees, like paperwork filing fees, as well as lender fees and lender points (also called mortgage points). So, if your new manufactured home loan is for $300,000, you should anticipate paying anywhere between $6,000 and $18,000 in closing costs.

With a lender like 21st Mortgage, you don’t have to worry about immediately covering closing costs. We use a rolling closing costs model, meaning your closing costs are folded into your overall mortgage. You can pay those costs off month-by-month instead of upfront, making it even easier to secure your mobile home refinance.

Mobile home with stone skirting, showcasing a prime candidate for refinance through 21st Mortgage.

Contact 21st Mortgage for your mobile home refinance

If you’re looking to refinance your mobile home, choosing the right lender is key. That’s why you should contact 21st Mortgage, whether you’re already a client or are looking to switch from your current lender.

As the nation’s number one mobile and manufactured home lender, we can help you find the right refinancing arrangement based on your budget, timeline, and other considerations. Even better, we don’t require you to own the land your mobile home sits on or need your home to be affixed to a permanent foundation for you to qualify. Contact us today to connect with a loan officer and explore your options!

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