|
Mobile Home
Notes A mobile home note is a promissory note
secured by a mobile home. Industry insiders often refer to
mobile home notes collectively as mobile home paper.
People who buy mobile homes often have a difficult time
obtaining financing. Like cars, mobile homes
depreciate over time, so banks do not consider older mobile
homes adequate collateral for a loan. They typically will
not finance a mobile home that is more than five years old.
Because of the lack of financing options available to
buyers, mobile home dealers and sellers often have to
finance the sale of mobile homes themselves. The seller
accepts a down payment and agrees to receive monthly
installments from the buyer. This transaction results in a
mobile home note.
A mobile home note may or may not involve real estate. If
the home is in a park, it usually sits on a leased lot
belonging to the park. Therefore, it does not have real
estate attached to it. If the mobile home seller owns the
property on which the home sits, the mobile home sale may
include the real estate.
Mobile home notes typically are structured for shorter
terms than traditional real estate notes. Since the cost of
a mobile home. A five to ten year amortization period is
average for a mobile home note. If the sale includes real
estate, however, terms could be slightly longer.
Previously, an individual holding a note didn't have much
of a choice but to collect the payments over time. But now,
several funding sources have expanded their real estate
note-buying business to include mobile home notes. Today,
mobile home notes are sold on the secondary market almost as
easily as private mortgage notes.
|
