Title loans are a short-term financing option that you may turn to if you find yourself strapped for cash. These loans are secured against personal property such as vehicles or mobile homes. Title loans are expensive and have high interest rates when compared with other types of financing. Many states have consumer protection laws that affect mobile home lending.
When you take out a standard mobile home loan, you borrow a sum of money and use the home as collateral. The lender can seize and sell the mobile home if you fail to pay off the debt. With a title loan, you actually sign your mobile home over to the lender. You normally have up to 60 days to buy back the home by repaying the loan plus the interest. You usually have to make one single payment rather than a series of payments. If you can't come up with the cash, the lender can either take your home or sell it to someone else.
Many states have laws that limit the size of title loans. In Oregon, a title loan with a 60-day repayment window cannot exceed $50,000. Some people use mobile home title loans to cover costs related to unexpected emergencies such as medical bills, legal fees or back taxes. Generally, lenders have to be licensed, although these loans are often sold through brokerage firms that connect lenders with borrowers. The broker normally charges an upfront fee, and the borrower, rather than the lender, usually covers this cost.
Banks, payday advance firms and title lenders are all bound by state lending laws. Many states have specific rules in place pertaining to title loans. In Oregon, a lender can't charge more than 36 percent interest on a title loan. However, a title lender can charge an origination fee or upfront commission in addition to the interest. Rules and limitations on these loans vary throughout the nation. In Oregon, for instance, you can a get mobile home title loan, but such loans are illegal in the state of Missouri (although lenders may secure title loans against cars and other types of personal property).
Title I Loans
The Department of Housing and Urban Development has a mobile home financing program that is known as Title I. You can use these loans to refurbish or repair a mobile home. However, unlike title loans, title I loans are conventional mortgage products. You don't sign your home over to a lender, but you do use your mobile home as collateral for the mortgage. You can only use a Title I loan to finance a home that has permanent foundations rather than a mobile home that can be moved.
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