Chattel “Home Only” Option

Chattel loans (rhymes with “cattle loans”) are the most common mobile home loans. It is the loan type used when the land the home sits on is not part of the loan package. If you don’t own your home’s land, you will likely need a chattel loan. Chattel loans typically have a slightly higher interest rate and a shorter loan period than a mortgage loan, plus there are some advantages. The shorter payback time reduces the actual dollars paid to the bank as interest; plus, it makes your home free and clear sooner than a more extended loan period. You don’t need to pay for private mortgage insurance (PMI) with a chattel loan. Finally, you can put your home in a mobile home community that offers more amenities than you may be able to afford if you placed your home on your own land (such as a giant swimming pool). Since you are spending less upfront, your down payment will be less (often much less) than if you needed to finance a home and the land, not to mention the freshwater, sewer or septic, electric, and gas connections. The smaller down payment makes it easier for many people to get into homeownership with a chattel loan than other loan types.