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Financing a purchase
The process of buying a manufactured home can seem intimidating to many people, and a major part of that process is getting financing. There are many lenders to choose from, and many different ways to borrow the money. With good credit you should not have a problem getting financed, and even with a few marks on your credit you should still be able to get approved. If you have bad credit, you might be able to buy, but your down payment and interest rate will be higher.
There are many financing options when purchasing a manufactured home. You can choose your local bank or credit union, or you can finance with lenders associated with the dealership. The dealership’s lenders will usually start with a mobile-home-only lender that might have more benefits than a local bank or credit union. Mobile home lenders will typically have lower credit requirements than banks do, and often have programs that allow you to pay off your loan early, eliminating a large portion of the interest you must pay.
Before you begin the home purchase process and fill out an application, make sure that everything on your credit report is in order. Verify that everything on it is correct, and if there is anything that is not, resolve the dilemma with the company that reported it. You can check your credit online at www.myfico.com, as well as other web sites.
Some dealers and lenders have zero down promotions occasionally, but when you go to buy a home you should expect to pay at least 5% of the sales price as down payment. This cost is a minimum that most lenders in the industry use payable by cash or equity in land. With bad credit you might be required to put as much as 20% or more down on the home. This cost is determined after you complete an application and your credit is reviewed.
Interest rates vary quite a bit depending on what kind of home you buy, if it is new or used, and how your credit is. If your credit is bad, you should expect to pay a higher interest rate. If you purchase a new home and you have good credit, you should get a good interest rate. Mobile home rates average around 9%, but they can vary up or down. With good credit, rebates, and special incentives you can get the rate down to a level that is very competitive with site built homes.
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