Can We Keep Our Manufactured Home With A Balloon Mortgage?


Dear Steve,

We have a home equity loan on our manufactured home. We have a 2020 Ram, a 2020 Soul that we just got (we thought the home equity thing was taken care of), a camper we just bought next year, and two personal loans. I work odd jobs here and there hustling for cash hubby works a 9-5.

We live in Michigan. When we deposit everything, our total income in the bank is about 7000 a month, sometimes more. So our payouts are about 5500 before this balloon payment.

We have a home equity loan that just matured. We tried several times to refinance but found out that our house can’t be financed except under a VA loan that we don’t qualify for.

But our Home equity loan reads that it gives us ten years of payoff at 2% principal plus 3.35 % interest per month, so this month the payment is $1225 (we initially were told $300 when we asked about it, but no one seems to remember telling us this) and it will go down monthly but we don’t $1225.

We live paycheck to paycheck. I work here and there making cash, and my hubby works 40 hours. Could we file chapter 13, and it still let us keep our cars, our camper, and our home and give us a payment we can afford?



Dear Michelle,

I am so very sympathetic to your situation. These balloon loans should be better described as landmine loans. They always seem to explode.

I’ve seen banks only to one-year balloon mortgages. It’s nuts.

Walking away from this situation, a big lesson learned is that it does not matter what anyone tells you about your loans. The final details and all that matters is what it says in the loan document you signed.

You’ll probably find a section in that document that will say something like, “everything we said before doesn’t count. This is the entire agreement between the parties.”

You should feel as if you are doing everything you can and working hard. Good for you. But the goal here is to find a sustainable balance rather than working yourself to death.

That will be more important as you get older.

Additionally, when you live paycheck to paycheck, you can’t save money or even save for retirement. So that is an important consideration.


Outside of winning the lottery or finding bags of cash, here are a couple of reasonable options to explore.


The bank your current mortgage with is not the only lender out there. I suggest you find a mortgage broker representing several lenders to explore all options to refinance your way out of the Home Equity Loan. Additionally, there are lenders specializing in manufactured homes, so that a lender might be waiting for you.

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Explore Bankruptcy Protection

I would find a bankruptcy attorney licensed to practice law in Michigan and meet with them. Michigan has a homestead exemption that may allow you to protect your home and still file a Chapter 7 bankruptcy to eliminate debt you can discharge in about 100 days.

Can We Keep Our Manufactured Home With A Balloon Mortgage?

Since you live on the financial edge, this might be an excellent time to seriously consider bankruptcy to get your finances reorganized and discharge what debt you can rather than just refinancing into an unsustainable position.


Talk to a local Michigan-licensed bankruptcy attorney and a mortgage broker to explore your options.

Take a good hard look at what your monthly budget would look like under each option.

Come back to this post and update me in the comments section with what you decide to do.

Damon Day - Pro Debt Coach

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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