Using mobile home equity is something that most people never consider. However, just like there are home equity loans for stick-built homes there are home equity loans for mobile homes as well. If you own a mobile home, there are a number of things that you could do with the equity. Instead of selling the mobile home and collecting the cash for your purposes, just take out a home equity loan instead. You can keep the mobile home and get the cash that you need. Here are a few things that you should understand about mobile home equity.
Builds Faster than Traditional Homes
Mobile homes tend to have a negative image surrounding them. Many people say mobile home and it conjures up images of unpleasant surroundings. However, more and more people are choosing mobile homes now for a variety of reasons. You can get some very nice mobile homes now that will be just as good as anything else you could buy. In addition to the improvements in quality, they can also help you build equity faster than you could with a stick-built home.
For one thing, the normal amortization period for a mobile home is 10 years. Therefore, you will own your home free and clear within a decade versus 30 years for a stick-built home. You will be paying off more of the principal balance on the loan and building more equity than you would with a stick-built home. Therefore, this can present a major advantage over other homes.
Once you have built up your equity relatively quickly, there are several things that you could use it for. Here are a few popular uses for mobile home equity.
- Debt consolidation- When you use your home equity to consolidate debt, you can usually save quite a bit of money on interest payments. When you are paying high credit card interest every month, you will be better off to pay the interest on a mobile home equity loan. You can get everything condensed down into one low payment instead of making several payments each and every month. When you change your debt to home equity debt, you can even deduct the interest that you pay from your taxable income. This will lower the amount of taxes that you will have to pay. This allows you to save money in two different ways.
- Invest- Another great use of your mobile home equity is to invest it. You could potentially start your own business, buy another mobile home to rent out or invest it in securities.
- Improve your mobile home- You could potentially put the money back into the mobile home and try to increase the value. If your mobile home is older, it might be time to update it with new finishes. You could replace the flooring, get new appliances, and upgrade the plumbing. Putting in a new heating and air system could be beneficial as well.