Differences in Interest Rates – “Manufactured / Mobile Homes” vs. “Stick Built Homes”

One of the most common questions I’m asked is: “Am I going to have to pay a higher Interest Rate because it’s a Mobile Home?”. The short answer is…not really. New Horizon Mortgage Concepts has aligned itself with Lenders that aren’t afraid of Manufactured Homes…and that gets reflected in the Interest Rates. In general, much of what Banks do is based upon perceived risk. If a Lender feels that a certain type of Borrower, or Housing Type, is  “riskier”…they’ll do a variety of things to “offset” that risk. Raising the Interest Rate is one the “tools” utilized to compensate for (perceived) risk. However, not all Lenders “perceive” Manufactured Homes as being a higher risk…and so the Interest Rates they offer are competitive with the Rates offered on other types of Properties. Keep in mind that Interest Rates are also determined  by Credit Scores, the type of Loan Program (for example Government vs. Conventional), and even what State a Property is located in. In many instances, we’ll have “well qualified” Borrowers paying a lower Interest Rate on a Manufactured Home than a lessor a qualified Borrower might pay on a “stick built” home. So, there’s more to Interest Rates than meets the eye…and our Clients are frequently surprised and ultimately pleased with the Interest Rate we secure for them on their Manufactured / Mobile Home Loans.