Mobile Home Equity Loan – Is It Possible?

Are you thinking about a mobile home equity loan? Is it possible in the UK? This article aims to answer your questions and ease your worries. We’ll explore:

•  What a home equity loan is
•  The real cost of a bad home equity loan
•  If you can release equity on a mobile home
•  Why some lenders don’t consider mobile homes
•  Other options to a mobile home equity loan

It's normal to feel unsure about this big step.

We know it’s a big choice, but we’re here to help you understand all about mobile home equity loans. Let’s get started!

Can you release equity on a mobile home?

Most lenders don’t offer home equity loans against mobile homes. They are usually only on offer to conventional freehold and leasehold properties. 

Can I release equity on my park home?

Lenders rarely offer home equity loans on park homes, which are also a type of mobile home. However, there are alternative borrowing options if you have a mobile/park home and need credit. 

Why don’t home equity lenders consider mobile homes?

A typical park-home purchase does not include ownership of the land, so it does not provide the land security required for a standard mortgage. Depreciation and site terms are additional considerations.

Check whether the site is licensed for residential or holiday use. A holiday home cannot simply be treated as a permanent main residence, and resale values are uncertain.

Alternatives to a mobile home equity loan

It might be really difficult to find a lender willing to offer you a mobile home equity loan, but there are other ways to source credit. You could:

1. Consider unsecured lending

There might be personal loans and credit cards that can offer you the amount of credit you need. However, unsecured lending is usually used to access smaller amounts in contrast to home equity loans, so they might not be a good option for you. 

2. Consider other secured loans

Other types of secured lending might offer you larger amounts of credit, depending on what is being used as security. Most secured loans are secured by a property, but you can find them to be secured by other assets, typically vehicles. So there may be some options out there with secured lending. 

3. Review any existing park-home finance

A typical park home cannot have a standard mortgage because the land is not owned with it. If you have specialist finance, ask about its actual refinance terms rather than assuming a normal remortgage is available.

Any refinancing depends on the product and lender. Compare fees, total cost, repayments and security; it does not automatically extend the term or release cash.

4. Consider selling

Selling may raise funds, but if it is your main home you need a suitable housing plan. Site rules, sale costs and any commission or outstanding finance must be assessed.

5. Consider debt solutions (if looking to consolidate debts)

Consolidating debts may simplify payments, but fees and a longer term can increase total costs. Secured borrowing puts the asset at risk; seek free debt advice before replacing unaffordable debts.

If this was your reason for trying to get a home equity loan, there are other debt solutions available. Read our debt solution guide to uncover further options. 

Can you use equity release schemes on a mobile home?

Another question that gets asked a lot is if you can take out an equity release scheme on a park home. 

This isn’t the same as taking out a home equity loan on a park home because home equity loans and equity release aren’t the same, although sometimes they are mistakenly used interchangeably. 

So first of all, what is the difference between home equity loans and equity release? 

Most standard lifetime mortgages start at age 55, but some payment-term lifetime mortgages are available from 50 and require interest payments for an agreed period. Home-reversion minimum ages and all other eligibility rules depend on the provider. Check the youngest applicant’s age and the actual product criteria. A lifetime mortgage is a loan secured on your home; you retain ownership. Interest that is not paid is added to the balance. The loan is usually settled when the last borrower dies or moves permanently into care, subject to the contract. Required or optional repayments vary by product. A home reversion plan is a sale of part or all of your home, usually below open-market value, in return for money and the right to remain under the plan’s occupancy terms. It is not a loan. The provider receives its agreed share when the home is sold.

The Equity Release Council is a voluntary standards body, not the statutory regulator. Standard lifetime mortgages normally require acceptable land/property security, which a typical park home does not provide.

The legal tenure, lender security and site restrictions matter as well as resale value.