When it comes to purchasing a mobile home, getting a loan can be tough. Despite the fact that it is a home, mobile homes are considered “personal property” rather than “real property.” This means that you cannot get a traditional loan due to the fact that it is not permanently built on the ground. Thankfully, you can get a loan through certain lenders. Here is how to find the best lender possible for your new potential home.
Compare different lenders.
There are many different companies that you can choose from when it comes to getting a mobile home loan. Many manufacturers offer to help you finance through themselves, but a one stop shop may not be as helpful as you think. Before you choose who you want to borrow from, you need to look at all the available lenders. Some common lenders include Fannie Mae and Freddie Mac. You can find more lenders through the Federal Housing Administration endorsements. These loans are much more forgiving underwriting, and the lender has much less buy-back risk when compared to other loans. Be sure to investigate all of your options before settling.
Avoid package deals.
Some mobile home dealers offer to act as your mortgage company. While this may be tempting and easy, don’t fall into this trap. More often than not, you can find a better deal with another lender. You may also pay for items you don’t intend to purchase when you go for a package deal such as prepaid park rent, insurance premiums, and sometimes furniture and stereo systems. These package deals also have high-interest rates when compared to other lenders that the FHA endorses.
Compare interest rates and term length.
Every company has a different interest rate on each of their loan options. Just like traditional homes, it’s important to investigate each interest rate to determine if it’s right for you. You can always attempt to decrease the interest rate. To do this, ask the lender if there’s any wiggle room in lowering the rate. Most companies allow you to pay more down to get a lower interest rate. Additionally, compare term lengths. If one company has high payments in a 10-year period while another has a lower 15-year term, the 15-year term may be perfect for your situation.
Interview the person handling your loan.
Before you pick a lender, interview the person that will be handling your loan. Ask about their experience and qualifications. If the representative seems rude, you may be able to ask for another within the same company. However, keep in mind that this is the individual you will speak to any time you have questions about your loan or if you ever choose to refinance. You want this person to be understanding and kind.
Research your lending company.
Always research the company that you’re borrowing from. Even though a lender has a familiar name, this doesn’t automatically mean that they are reputable. Check if the company has any recent lawsuits against them and the reason for the lawsuits. While this may seem extreme, it can avoid headaches later such as balloon payments or hidden fees that may be hidden in your loan.