Bad Credit Mobile Home Loan
How to Get a Bad Credit Mobile Home Loan
Many people love the affordability and quaintness of living in a mobile home. Today’s mobile homes, however, are not as cheap as one might imagine. Just like full-size, single-family houses, most new and slightly-used mobile homes require a loan for purchase. This is no problem for those with good credit, but can be an obstacle for those whose credit has a few blemishes. Fortunately, lenders exist who are willing to give out bad credit mobile home loans, and they are not at all difficult to get for people who have a regular source of income. For this reason, many people with bad credit turn to mobile homes as an option while they build their credit score again. This is, perhaps, the best part of a bad credit mobile home loan: it gives the borrower the ability to improve their credit score.
Bad credit mobile home loans work much differently than a regular mortgage. These loans are more like personal or auto loans. The mobile home acts as collateral against the value of the loan, lenders are willing to write the loan because of the higher interest rates for those who have bad credit. Two conditions must be met for a bad credit mobile home loan to be approved: the borrower must have a stable source of income high enough to meet the payment, and the borrower must own the land the mobile home will sit on. This is not as restraining as it sounds because it is possible to get a bad credit mobile home loan for both the mobile and the land together.
Bad credit mobile home loans come in several varieties. They can have either fixed or adjustable interest, and can be written for up to 95% of the value of the mobile home. There is an exception, however, if the mobile home is to be used as a vacation or second home. In this case, only 90% of the value will be financed. What makes a bad credit mobile home loan easier for vacation homes is that there is a good chance that the equity of the primary residence can be used to cover collateral on the mobile home.
Approval for bad credit mobile home loans is a very subjective matter. It is the goal of the borrower to show himself or herself as someone capable of paying back the loan. Some lenders will decline the loan while others will accept it based on the same criteria. This means if a borrower ever get turned down, just move on to the next lender and hope for higher compatibility. The next lender could see something that the previous one did not.
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