Anyone who has tried to buy something with bad credit knows that it can be pretty tough. Thankfully, there are ways that you can purchase a mobile home even with a low credit score. Before you give up on having a place of your dreams, here is how to work toward your mobile home.
Know your credit score.
The first thing you need to do before you try to purchase a mobile home is to pull your own credit score. You can get this using a website such as CreditKarma, or by requesting your credit report through each of the three main credit bureaus—Experian, Equifax, and TransUnion. Each of these methods allows you to see your credit report absolutely free once per year. By looking at your credit score, you can understand what you need to do to fix it. Even raising it a little improves the chances of you getting a loan.
Save for a large down payment.
The larger the down payment, the more likely a lending company will be to give you a loan. Additionally, a large down payment will decrease the amount of money you have to spend over time and drop your interest rates. While it may seem difficult now, you can create a long-term plan to save up for a down payment. Websites like SmartAsset allow you to see how much you should save to get the home of your dreams. For example, if your home is $50,000, you should have a minimum down payment of $1,750. Putting down 10-20% will decrease your liability and give you a better chance of getting a loan.
Consider an HUD home loan.
The Housing and Urban Development offers loans to those who want to purchase a manufactured home but have limited income or bad credit. There are a number of requirements that you must adhere to if you want a loan through HUD such as having sufficient funds to make a minimum required down payment. The maximum amount of money you can borrow from this type of loan is $69,678. If you do not have a plot of land, you can lease or purchase. To lease land, HUD requires the owner of the property to provide you, the homeowner, with an initial lease term of three years. If you choose to purchase your land, you have a maximum loan amount of $23,226.
Consider a mobile home that was built before 1976.
For a structure to qualify as a mobile home, it has to be built before June 15, 1976. However, there are mobile homes available for purchase that were constructed prior to this date. Fortunately, these homes are considered “real property,” which means they’re eligible for real estate loans (mortgages). To fit these criteria, the home must also rest on a permanent foundation and no longer be mobile. The lot must also be part of the sale and not in a mobile home park. By using this method, the options open up to any bank that is willing to provide you with a mortgage.