Looking for and applying for manufactured homes especially if you have bad credit might seem incredibly daunting and overwhelming. Although you have the right information to make your task easier, where do you even begin?
Available Housing Loan Options
Whether it is your first home or not, owning a new space is an exciting prospect. But before you dive headfirst with the idea, you also have to think twice.
Here are a couple of housing loan options that you can consider:
- Chattel loan: This type of loan is for non-permanent foundations, otherwise known as “mobile homes.” Depending on your current credit rating, you arere expected to place a 5 – 10% down.
- Personal loans: The loan terms for personal loans are about 15 years or less. 20% down is expected, and even more than that, if you have a poor credit history.
- Owner financing: Through a bit of luck, you might come across a mobile homeowner who is willing to extend their credit to you.
- A secured personal loan from a friend or relative
Now, moving on, we will spill the details on how you can purchase a manufactured home even if you have bad credit.
Have a Down Payment
Buying a manufactured home is different from buying your average home because mobile homes tend to depreciate over time. As a result, most lenders require up-front down payment before giving out the loan, especially for individuals with poor credit history.
If you can place about 20-30 percent of the total cost, then there is a better chance that your loan will be approved.
Individuals with poor credit and cannot afford a down payment will have a difficult time of having their loan approved from those that can.
Look Into Your Credit Report
Get a credit report. The credit report can be obtained in a variety of ways. But the most vital thing is that you need to get it from one of the three biggest credit bureaus ‒ Equifax, TransUnion, and Experian.
While some services allow you to buy a subscription to get your credit report, you can get a free report every year from each bureau.
However, remember that you still need to pay a small sum for the subscription fee to view your credit score. Note that it is worth paying the extra cash to see where you currently are, and what needs fixing.
Once you already have the information, bring it to a professional for credit counseling. These experts will assess your situation, and make recommendations (if any) when it comes to financing your manufactured home.
Get a Co-signer
Having a co-signer helps boost your purchasing power. Having a person to co-sign does not mean that they will be living in your home. Instead, they are known to be a “non-occupant co-borrower.”
The government and other conventional programs have authorized the existence of a co-signer. Most programs do not place the non-occupant borrower on the title.
Look Into Federal Housing Programs
The US Department of Housing and Development, also known as HUD, offers special loans to refinance or buy manufactured homes to people that qualify and meet the required income limitations.
The maximum loan rates vary depending on the particular loan type that you need. For instance, the maximum loan amount that you can avail for a manufactured home is only $69,678, while the maximum amount that you can loan for a house and lot is $92,904.
That’s why, when planning to loan for a HUD home, have a clear picture of what you need.
Show a Positive Rent History
You can show that you have a positive rent history without a mortgage. For instance, if you moved out on your own and you are paying your rent, this may count.
Most lenders verify the previous 12-24 months of your housing history. In some cases, they will ask documents from your landlord such as Verification of Rent. They might even look for canceled checks for the last year. This helps them verify how timely your payments are.
Look for Alternative Options
If you are personally struggling to find a lender that meets your needs, then finding something else that works better for you and your family.
For instance, you might work out a financing arrangement. Companies like Superloans offers bad credit loans. You can also secure a personal loan from a family member or friend.
Let’s be realistic here. You will never know who would be happy to help buy the home of your own!
Over to You
Although it might seem a bit challenging at first, securing a manufactured home even if you have bad credit is possible. The entire process might be a bit daunting at first, but you will eventually get what you worked so hard for ‒ a home you can call yours.
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