Mobile Home Loans
September 21, 2009 by admin
Filed under Mortgage Loans
Obtaining a mobile home loan can be very tricky when compared to other home loans. This collection of information will allow you to decide what loan is best for you, depending on the situation you are in.
First, Let’s cover the basics. There are two main loan types people tend to use when purchasing mobile homes.
The first is Mortgage Loan. The mortgage loan has specific requirements that must be met in order to qualify that will be covered shortly.
The second is a Personal Property Loan. These are best if the mobile home is on a rented piece of land.
Initially, let’s take a look at Mortgage Loans for mobile homes.
If you plan on applying for a mortgage loan to cover the costs of buying a mobile home, you have to be sure that you own the land on which the mobile home will be placed. Mortgage loans also require you to have a foundation to assure that the mobile home is where it is going to be for the long haul. Putting on a foundation means that you will have to take off the wheels and axles.
If you meet both qualifications, own the land where home will be located and have a permanent foundation, you meet the major requirements to apply for a standard mortgage loan.
Now, lets look at using Personal Property Loans.
If your home is going to be located on rented property or if you do not have a permanent foundation, you will need to use a personal property loan. You can find this type of loan through numerous lenders. The company you buy your mobile home from will usually make contact with this type of lender for you.
Choosing which type of loan will work the best for you, will be easier now that you know what options you have.
If you meet the requirements for a mortgage loan, you will find this is most often the best type of loan for you. You will be able to get better interest rates and better repayment terms with a standard mortgage loan. Personally, I suggest that you use a personal property loan if, and only if, you cannot qualify for a mortgage loan.
You may be wondering if it is possible to get mobile home financing if you have bad credit.
In order to get a mobile home loan when you have bad credit, you have to have a FICO score that is 550 or higher. Your interest rates will be the highest if your FICO score is 550-620. If your score is 620-650, most banks will lend you the money. The problem is that you will still have to face interest rates that are higher than prime.
If you have good credit, a score of 720 or higher, you will be offered the best interest rates.
In addition to your credit score, lenders will look have how much you bring in minus your debts to be sure that you can repay the loan.
If you have bad credit, it is important to know how you can improve it.
Even if you were able to get a mortgage with you current credit score, put the effort into improving this score. Improving your credit history will allow you to do a bad credit remortgage and reduce your monthly mortgage payment. In fact, by paying of credit card debt, your credit score could increase by as much as 255 points. The improved score will show on credit reports in just a few months.
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