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INSTALLMENT FAQ
1. What is an installment loan?
Answer. An installment loan is a loan based on a fixed amount which requires regular monthly payments. An installment loan is different than a mortgage loan because installment loans typically do not involve real estate.
Manufactured home loans are considered to be installment loans when the home is not located on land which is owned or being purchased by the borrwer. This type of loan is similar to an automobile loan.
Installment loans are often called personal property loans or "chattel" loans.
2. How is an installment loan different from a mortgage loan?
Answer. Although installment loans involve slightly higher interest rates because the bank cannot use the land as collateral, they typically have less closing costs.
Installment loans involve less paperwork and take less time to process.
The amount that can be borrowed is typically less than a mortgage loan because the bank can only use the value of the home as collateral. Land value is not included.
Installment loans require a cash downpayment because the bank cannot include any land as down payment.