Anyone know if this is a legal interest rate for a mobile home mortgage?

My Husband and I entered into a mortgage in July 2011 and the interest rate is 11.5%. The mortgage company is 21st mortgage corporation located in Knoxville,Tn. We reside in Indiana. I have seen that there are usury laws that say loans shouldn't exceed 8% in Indiana and 10% in Tennessee. I am wondering if this is legal for them to be charging us this absurd interest rate?

Update:

Unfortunately we've already agreed to these terms. Our credit isn't horrible we are both in the lower 600's.

Update 2:

It says its a mortgage in our paper work not a mobile home loan. I was just wondering cause I applied for refinancing to get a lower interest rate recently and when I spoke to a man at the mortgage company today he told me they were charging a higher interest rate than allowed in my state.

8 Answers

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  • 6 years ago
    Best Answer

    Indiana is one of two states that not have usury limit, so they can charge whatever you are willing to pay. The location of the bank is not important, no matter where they are they have to follow the law where the property is located.

  • 6 years ago

    you have a Q here in YA so I assume it's for an answer plus advice. A person does NOT get a mortgage on a mobile home since a mobile home is a "vehicle" and not a home and it requires vehicle tags. What you got was a mobile home loan, and therefore the rates would be different than for a brick and mortar home on a lot. But of course you could call any mobile home dealership and ask what the rate was for a MH loan back in 2011 (that was 2 years ago). You also need to be aware that MH's aren't as safe as apartment rentals or brick and mortar homes, and that they remove the wheels when you place the MH on a pad and get your tie downs and skirting so it's no longer transportable. And depending on where you're located (new flood zone maps are out by FEMA) you might need floor insurance as well as MH insurance. Of course if you feel there was fraud you might want to ask the attorney general of TN to look into it. Or you might check the internet or ask your question of the dealership where you bought your MH.

  • 6 years ago

    Currently the consumer loan rate limit is near 25% (depends on factors listed in code) in Indiana (which would govern the loan rate, not Tenesse). Also many corporations may have offices in one state, but are incorporated in DE or other states that have special corporation protections. To answer your question, yes it is legal (I am not a lawyer, but as far as I can tell). You need to assess what your current Loan to Value would be if you refinanced with another bank, but you would need to be above 740 FICO to be sure to get a much better rate, if your payments are current. Pay as much on the principal as you can each month so the amoratization will work out better for you. That way the percentage of the payment going into your actual home will be higher. Best of luck to you.

  • Meghan
    Lv 7
    6 years ago

    It's usually the usury rate plus prime. Right now, the prime interest rate is somewhere around 3%.

    Basically, you have super crappy credit and are being charged the highest interest rate they can legally charge you. It's unlikely that another mortgage company would give you any better a rate.

    I will strongly caution you against buying a mobile home anyway. Unlike a traditional home, they lose value over time. You'll never be able to sell it and pay off the mortgage.

    I'd urge you to consider a few options. Buy a more traditional home that will increase in value. But more importantly, I'd suggest putting your home search on hold for about 6 months to repair your credit and increase your score so you are eligible for a better interest rate.

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  • 6 years ago

    That is typical for mobile home loans. They are personal property and not real estate. Last I looked years ago the interest rate started at 10% for excellent credit. I am surprised you are claiming it is so high. Credit card interest rates are twice that.

  • 6 years ago

    Maximum interest rate in Indiana is 21% for loans under $50,000

  • 6 years ago

    Most state usery laws allow a lender to charge higher than the designated limit (to a certain point) with mutual agreement!

    Banking is one of the more highly regulated industries so if you ever have a worry you are getting screwed all you need to do is call your state banking/financial institution office or attorney general.

  • Rob
    Lv 7
    6 years ago

    perfectly legal for a trailer.

    Source(s): exrenter
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