What is a chattel mortgage?

A chattel mortgage is a loan to purchase movable personal property, such as construction equipment or a mobile home. Chattel mortgages often carry higher interest rates and have fewer consumer protections than traditional mortgages. If a borrower defaults on a chattel mortgage, the lender can repossess the property or equipment.

Do chattel mortgages work for movable property?

Chattel mortgages work for various types of movable personal property, including: Manufactured homes: Manufactured homes, formerly known as “mobile homes,” are a type of property often financed with chattel mortgages. These movable homes are built offsite and relocated using a chassis.

Why are chattel loans used for mobile homes?

This is why chattel mortgages are often used for mobile homes. Chattel loans are also common in the business world. Companies use this type of loan to purchase additional property, and assets such as operational equipment and vehicles that are fully owned by the company are used as collateral for the loan.