What Credit Score is Needed To Buy a Mobile Home
Buying a mobile home can be an excellent alternative to a traditional house, as you can move it when necessary, change your place of residence, and even spend less money. However, you're still going to be paying thousands of dollars and likely need to take out a loan.
But what credit score is needed to buy a mobile home? Let's examine this question to help make this purchasing decision more manageable for you.
What Credit Score Is Needed To Buy a Mobile Home? The Answer May Surprise You
When examining the different minimum credit scores required for buying a mobile home, we ran into a surprise: the answer is much lower than you might expect.
Typically, we found a range between 580-620, which is within the poor to the acceptable range.
When compared to home lending rates, this credit score is very reasonable. Most traditional home loans require a minimum of 620 or higher, depending on the loan.
Naturally, there were lenders who preferred a higher credit score from some buyers. Just as importantly, some lenders will adjust the minimum score based on the value of the mobile home. For example, an inexpensive trailer may be available for a reasonably low credit score, but one that may be worth about as much or even more than a traditional home may require a higher credit score: sometimes up to 650 or so.
However, this situation is rare, and most lenders will ask for a 580-620 minimum credit score when selling a mobile home. They'll also examine various elements beyond your credit score, including your assets, any debt you may possess, and your payment history. This past is critical to determine because it will give the lender and the seller an idea of how likely you are to default on the loan at any time.
However, understand that a lower credit loan (particularly a specialized poor-credit loan) will have a higher interest rate. It isn't uncommon for people to get rates between 7-10% on a bad credit loan and sometimes even higher. But, again, the limit will likely depend on your state and credit score. As a result, it is vital to take steps to minimize these concerns (which we'll talk about in more depth later.)
Why Is the Minimum Credit Score So Different For Mobile Homes?
The differing minimum credit scores between traditional and mobile homes occur due to various circumstances. These facts can be hard to understand or predict if you don't understand the many differences between these two house types. Just a few factors to consider include:
Traditional homes and mobile homes may have other available loans in your area, such as an FHA loan. These typically have a lower minimum credit score and are a good choice if you also don't have a lot of money for a downpayment.
Manufactured or mobile homes typically don't have the same kind of value as a traditional home and may also be considered somewhat cheaper. As a result, minimum credit scores may naturally be lower as a way to compensate for this fact.
Rules in different states and communities may differ, with some dictating that different minimum credit scores be accepted. For example, some states may classify motor homes closer to vehicles than houses, depending on the type of mobile home you own.
Mobile home dealers often provide financing directly to customers and will usually work with people who have lower credit scores. In this way, lending is a lot more like buying for a vehicle, though you'll have to put down a more significant down payment on a mobile home than a car.
Other potential lending options:
VA loans for military members
Chattel mortgage (if your mobile home is registered as a vehicle rather than a house)
Personal loans directly from banks or friends.
When financing your mobile home, expect to pay at least 10% of the total cost of your vehicle. You'll also need to consider things like your annual income, your debt-to-income ratio, and much more.
In other words, your purchase will be much more than just your credit score.
However, you can also improve your credit score before you buy to make sure that you get the best rates possible.
Improving Your Credit Score
If you're trying to buy a mobile home and your credit score is below 580, you're in a pretty rough situation. You likely have a high amount of debt or a poor repayment history clinging to your record. Thankfully, you can improve your credit score in a variety of ways. Here are just a few:
Repay Old Debts
Your debt-to-credit ratio needs to be mostly credit: at least 70:30. If you do not have a good ratio, start paying off these old debts as much as possible. If you can't afford to pay them all at once, start taking a little more money out of each payment to avoid the minimum amount.
Continue to Pay Your Bills
Credit scoring companies will rank you very highly if you continue to pay your bills on time. Set up automatic payments so that you're never behind, including on things like your utility and cellphone bills. Some credit bureaus may even consider these payments.
Apply for One New Credit Card
You've probably heard that new credit cards expand your credit line and could help to improve your score. That's true in some ways: but too many new credit cards cause multiple hard inquiries that could impact your score. One new credit line should be enough.
Try to pay attention to these simple steps, and you can minimize complications with your overall credit score. However, some of these steps may not be appropriate for you if you have a limited budget. Instead, you may need to take the time to identify a lender who is willing to work with you despite your credit.
Doing so will be a very tricky process. Some lenders don't bother with mobile homes because they are often considered a specialized and unique lending problem. Therefore, it might be a good idea to work with someone who can help you identify the best lending possibilities for your needs.
What We Can Do to Help?
Are you struggling to find a lender who will help you pay for your mobile home? If so, you're not alone. However, it often requires specialized help from someone who cares about your needs to manage this problem. That's where we come into play. At Goalry, we provide financial connections for those who need them.
We're not a lender, and we cannot give you money but can help you find someone who will.
Goalry is designed to search through various lending firms and connect you to one that understands your needs. You can download our application, sign up with a profile, and then seek out the different lending institutions throughout the nation. Information includes contact data, minimum credit scores, and other requirements that help to make it easier to understand your loan.
As you narrow down your options, you should identify a handful of lenders that make sense for you. At this point, all you need to do is talk with them and see if your credit score is appropriate for a mobile home. Goalry mall can help give you all the information you need to work with them, including contact information and any other data, making this process smoother and more efficient. Don’t hesitate - Get your member key today!
Deal with Your Money Step By Step. Creditry Is Here to Help!
Take Care Of Your Borrowing Needs
By improving your credit score and finding a lender you can trust, you can narrow down any potential risks of trouble when buying a mobile home. You can then quickly move into the house and even flip it if you're clever. The possibilities are potentially endless, so don't be afraid to experiment a little and see what kind of unique things could impact your new mobile home purchase.