A mobile home mortgage with down payment of less than 20 percent is considered a low down payment mobile home loan. The upside of a low down payment is that you need less money to get into your mobile home. The downside? You have to finance more, meaning your monthly payment will be higher as will the amount of money you have to pay in interest.

However, if you don not have a huge down payment saved and can afford the higher monthly payment, a low down payment mobile home loan is a way you can purchase your own home and not have to continue paying rent.

Mortgage companies, including those forms that specialize in mobile home loans, will most likely require private mortgage insurance (PMI) on low down payment loans. This protects the mortgage company against losing money if you stop making your mobile home mortgage payments. They want to make sure they do not lose their money even though, if you can not make your mortgage payments, you will lose your mobile home through foreclosure.

Having to pay PMI increases your monthly mortgage payments, as it is an additional fee that is unnecessary if you had paid at least 20 percent down. When the amount of money you owe on your loan gets down to 80 percent of the value of your home, you can contact the company holding your mortgage and ask to have them drop your PMI. Most people forget to do this and continue to pay this insurance long after it is no longer required. Remember, private mortgage insurance does not benefit you…only the mortgage company…and is not required once your mortgage is reduced to 80 percent of the value of your mobile home, so do not pay for it any longer than you have to.

A low down payment mobile home loan may be the only way you can get into your mobile home, so it is certainly an option for you to look into when trying to buy your mobile home. However do not go for a low down payment mobile home loan if you are not truly confident you can pay your higher monthly mortgage payment.

Author: Milt Wapner
Article Source: EzineArticles.com
Provided by: US Dollar credit card

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