Chattel Loans in Texas
If You Need a Chattel Loan in Texas We Can Help!
Figuring out how to get Texas mobile home financing can be a challenge without expert help. If your manufactured home is permanently affixed to a HUD-approved foundation it can be purchased with a conventional mortgage such as an FHA loan. This would include a modular home on a permanent foundation.
However, MOST mobile homes are typically placed on blocks and gravel pads. This makes your mobile home titled as personal property, and it can ONLY be financed with a chattel loan mortgage. Chattel mortgages are typically what people refer to as mobile home loans - it is a loan on personal property and not real estate. Personal property loans are different than traditional FHA mortgages.
On average, about 65 percent of the manufactured home buyers who choose to affix their homes to land they already own or are still paying for—and therefore could purchase them with the help of a traditional mortgage loan —prefer to take out manufactured home loans in the form of a personal property loans like a chattel mortgage. This would include, for example, most mobile homes on land we offer in our land and home packages catalog.
Considering the confusion surrounding the topic of mobile home financing in Texas and the increasingly widespread use of chattel mortgages as a mobile home loan option, there is no better time than now to talk about this financing option.
A Chattel mortgage is a form of mobile home financing that can be used to purchase or refinance a manufactured home that’s not permanently attached to land. For example, chattel loans can be used to finance the purchase of manufactured homes that are placed in land-lease communities, on individual rental sites, on family land, or on land that home buyers own outright or are still paying for.
What is a Chattel Mortgage?
How a Chattel Loan in Texas Works in Practice
In a chattel loan in Texas, the lender holds a lien against the manufactured home that is used as collateral for the loan. The lien protects the lender’s interest in the property by providing some security in the case that the borrower fails to fulfill contract provisions. In the event of a default in payments, for instance, the lender can initiate repossession and sell the mobile home to pay off the debt from the mobile home loan. Once the borrower repays the loan, the lender begins the process of removing the lien.
A Chattel mortgage can deliver a series of benefits, such as:
The interest charged on the loan is tax deductible, with some limitations
Monthly mortgage payments can be structured similar to conventional mortgage payments
Because chattel mortgages are secured loans, their interest rates are generally lower compared to interest rates associated with unsecured loans.
Before applying for a Texas chattel loan, a prospective home buyer should carefully review the eligibility requirements of the financing options available for these types of homes, and ponder their pros and cons.
After deciding which manufactured home loans financing alternative is best for his or her particular financial situation, the buyer should get approved for the loan with a quality loan company before starting the mobile home hunting process.
Benefits of Chattel Loans as a Finance Option for a New Texas Mobile Home
Get Help Finding a Chattel Loan Lender
Our experienced team is ready to help. Contact us below by e-mail to get started finding the right chattel loan lender in Texas to secure your financing for a new mobile home.