How To Buy A Mobile Home With Bad Credit
Knowing how to buy a mobile home with bad credit can be an invaluable asset. Contrary to popular belief, there are loans available for the consumer with bad credit that can be applied towards the purchase of a manufactured home. Although the terms and conditions of the loan will vary by the lending institution, credit circumstances of the buyer and the type of mobile home purchased, there are a few things that the consumer should know when it comes to buying a mobile home with bad credit.
- Know your resources. Government programs that are designed for low-income individuals may be able to assist those wishing to buy a mobile home with bad credit. However, there may be stringent requirements for such a loan. For example, the U.S. Department of Housing and Urban Development places a cap on the loan amount for a manufactured home. In addition to this, the severity of a person's credit will play a crucial role in obtaining such government loans. Buying a mobile home with bad credit may be possible under these programs, but this is not for those with extremely bad credit.
- Arrange collateral. Buying a mobile home with bad credit can be as simple as having collateral, namely personal property, such as land. The property serves as a guarantee of payment. The drawback to this is that in the event that you fall behind on payments, not only do you stand to lose the mobile home, but the property as well.
- Improve your credit. To increase the odds of obtaining a mobile home loan with bad credit, try improving your credit before applying for a loan. Small steps for improving credit, such as paying bills on time and paying down debt, can raise your credit score. Also, you can request that negative items be removed from your credit report if the account has been paid in full. However, this decision is solely up to the initial creditor.
- Make a down payment. Although many lenders do not require the full twenty percent down payment, the larger the down payment, the better. Those that can afford a higher down payment are generally considered less risky lenders. Making the standard twenty percent, or even more, can help when trying to buy a mobile home with bad credit.
- Seek out alternatives. If securing a loan seems next to impossible, there are still other options available. This can include utilizing a lender that specializes in high risk loans and land contracts. However, using the services of a high risk lender can mean paying more in interest and fees over time. With a land contract, the consumer purchases the home directly from the seller, an individual, in payments. This method of buying a mobile home with bad credit will still require a down payment and may or may not require a credit check.