Securing a mobile home mortgage often involves meeting the same requirements borrowers may face with traditional home loans. For example, you will likely need good credit and a low income-to-debt ratio. Many lenders will also expect you to have a reasonable down payment. In many cases, however, your ability to secure a mortgage for a mobile home will also depend on whether it will be permanently affixed to land. If it will not be attached to land permanently, you may need a personal property loan instead.
Much like choosing a mortgage on a traditional home, securing the best rates and terms for a mobile home mortgage usually requires good credit. Most mobile home mortgage lenders prefer borrowers with high credit scores. This is because they view these borrowers as less of a credit risk. Their past history of paying bills on time gives the lenders confidence that borrowers with good credit will pay their mortgage loans. There may be some lenders who are willing to offer mobile home mortgages to individuals who have bad credit, but these loans may be harder to get and may require the borrower to pay much higher interest rates.
Your debt-to-income ratio may also matter when you are trying to secure a mobile home mortgage. If you have high debt, you may have a harder time securing a mobile home mortgage. Lenders may evaluate your debt in relation to your income and be concerned that you will have a difficult time paying your mobile home mortgage in light of your existing debt. In such a case, the answer may be to pay off some of your existing debt and make your financial situation more stable.
When you want to secure a mobile home mortgage, you may also have to consider whether your home will be permanently fixed to land or not. In many jurisdictions, lenders are only willing to offer mortgage loans to borrowers who will own the land on which the mobile home is affixed. For example, these lenders may offer mortgages to people who wish to finance a mobile home and land or the land only. They may also offer loans to people who already own land and just want to purchase a mobile home to permanently settle on their property.
If you do not intend to affix your mobile home to land permanently, this doesn’t mean you cannot secure financing. Instead, you may secure a personal property loan. Often, these loans are offered by retail sellers of mobile homes. These lenders may also require borrowers to have good credit. In many cases, however, they apply higher interest rates and shorter loan terms than are offered with mobile home mortgages.