Final answer:
Mobile home purchases are often financed through mortgage loans or special loans designed for mobile homes. Zero-equity home loans and adjustable-rate mortgages are examples of financing that have been used, but can pose significant risks to borrowers. The financial landscape has evolved, allowing different levels of freedom in borrowing, as influenced by market conditions and regulatory environments.
Step-by-step explanation:
The purchase of a mobile home is often financed through mortgage loans or loans specifically tailored for mobile homes, which may have different terms compared to traditional mortgages. Historically, these loans could be obtained from a variety of financial institutions and often ended up being managed by a few large firms. The types of mortgage loans available to consumers have varied over the years, with some notable examples being zero-equity home loans and adjustable-rate mortgages (ARMs). However, these financial mechanisms presented significant risks, as they were often marketed to individuals without a sophisticated understanding of finance and could lead to situations where borrowers defaulted, causing significant financial strain and potential loss of property.
Moreover, as the real estate and stock markets have historically seen significant gains, political pressure and deregulation led to an environment where lenders could extend credit more freely. This situation sometimes resulted in financial turmoil, as evidenced during the housing bubble peak when many were able to secure loans for new home constructions, as depicted in Figure 24.1 mentioning Credit by Tim Pierce/Flickr Creative Commons. During different economic periods, the balance of advantage between borrowers and lenders can fluctuate based on mortgage interest rates and inflation, as shown in various tables illustrating these financial indicators over the years.