It’s an unfortunate, yet irrefutable,fact of life that whenever discussing issues related to mortgages or financing that we seem to accidentally omit our mobile home dwelling neighbours. Sure, they only account for about 0.5% of the nations population yet that is still just under 200,000 home owners which is a number deserving of recognition.
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Why is this especially disconcerting for mobile home owners?
Mobile homes are still technically considered to be “affordable housing”. To many, they offer the same space and possibilities as a family-sized stick-built home at the fraction of the cost. The drastic leaps in quality they have made over the last decade or so has made them an attraction option to many and some do choose to reside in them through absolute choice.
However, many mobile home owners also purchase these homes because they are much less expensive and because they are in a financially vulnerable or precarious state.
For some owners, having the option to access the equity in their home in the near future could be absolutely critical.
Some of the new regulations that has come in to place make that either nearly impossible through traditional and regulated means or at great cost through alternative avenues.
Most traditional lenders don’t make loans unless the home is also insured if they are located within a mobile home park. This requirement causes a problem when it combines with new regulation that also prohibits mobile homes from being refinanced if they are insured. Do you see the problem yet?
This effectively locks many mobile home owners out of any options through traditional financial institutions if they need to refinance for whatever reason.
So, what options do mobile home owners have?
Unfortunately, there isn’t exactly a ton of options available to mobile home owners just like their aren’t to traditional homeowners. It’s worth mentioning that mobile homes aren’t being targeted in any specific way. There is now legislation or regulations that are unique to mobile homes, it’s just an unhappy coincidence of to separate requirements by two separate entities.
It also raises the secondary problem that government is unlikely to address mobile homeowners concerns directly as they are loathe to make that distinction in law.
This leaves mobile homeowners with only one real recourse: private lenders. Private lenders have come a long way from little-known and mistrusted sources of mortgages or loans.
However, considering that they are aware of current mobile home owners desperation in this situation and that private lenders typically do hand out loans with the intention of making as large a profit as possible, it could cost these owners.
It seems that the average rate for borrowers in this situation is over 10% with variable upfront fee. As steep as that may sound, it suddenly feels much more acceptable if you are locked out of every traditional lender and need to access equity in a tight spot.
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