If you own a mobile home or trailer, you may be able to take out a loan backed by the home. There are a variety of types of loans available, including some that are more similar to mortgages on a traditional house and some that are more similar to car loans. Generally, they will all require you to pledge the home and, if you own it, the land it's on as collateral.
A title loan is one that is backed by some asset as collateral, which in this case would be your mobile home. This means that if you default on that loan, the lender can take your mobile home from you.
Federally Insured Loans
As with other types of home purchases, banks and other lending institutions can make loans to enable the purchase of a mobile home, and potentially the land it's on, with insurance from the federal Department of Housing and Urban Development. There's a limit on how large the loan can be and what it can be used for, and the home itself must meet certain standards.
It can either be installed on land that you own or land that you rent as part of a mobile home park. You can contact HUD, a participating financial institution or a housing counseling agency to find out more details. Generally, more housing lenders will be willing to issue you a loan, federally insured or not, if the home is already attached to a parcel of land and you're buying both the home and the land to which it's attached.
Title Pawn Loans
You can also take out a loan backed by a mobile home that's more similar to a car loan than a mortgage. You will generally have fewer legal rights and often pay higher interest than with something more akin to a traditional home loan. For example, not all the information disclosures that a bank would have to give you for a mortgage would apply for such a loan.
Defaults, Repossessions and Foreclosures
Generally, if you fail to pay a loan on a mobile home, the lender will have the right to legally seize the home by repossession or foreclosure. Which procedure applies and exactly what court process is required depends on whether the home is considered real or personal property, which can depend on how permanently it's installed, where it's located and in what state you're located.
If the land on which the home sits is owned or mortgaged separately from the home itself, a foreclosure on the land may not entitle the lender to take ownership of the home, depending on the terms of the mortgage, state law and how permanently the home is installed. If you're dealing with such a legal process, it can be a good idea to consult a lawyer to understand your options.
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