Bad Credit Manufactured Home Loans

Written by Beth Hrusch
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When your home of choice is a manufactured home, there are certain factors to consider when looking for a loan. Depending on the type of home you are looking to build, you may not qualify for a home loan but rather one that more closely resembles a personal loan. Car and boat loans are examples of this kind of loan. In general, a "mobile" home will invite scrutiny by lenders, because it is categorized as personal property rather than a fixed building.

The Less Mobile the Better

Of course, some manufactured homes are less mobile than others. These types of homes, however, are still treated differently. Higher interest rates, a larger down payment and a shorter term are typical features of a manufactured home loan. If the borrower has bad credit or is in bankruptcy, then it becomes much more difficult to get terms that the borrower can accept. A high monthly payment may be out of the question, and many lenders will not want to stretch out the term.

Finding a lender who is familiar with manufactured home loans becomes important to a "high-risk" borrower. Changes in the mobile home industry have resulted in more of these homes being built with permanent foundations. Also, if the borrower owns the land on which the home rests, then he or she may be able to get a conventional home loan. A person with bad credit who obtains this loan will benefit from its tax-deductible status as well as the opportunity it gives him to build equity and repair credit.

Manufactured homes represent a growing housing market, but, for the most part, they still do not qualify for conventional financing. Manufactured homes depreciate more quickly and have shorter life spans than other homes. Borrowers often have limited collateral, and the type of loan they can get may come with higher fees. Financing through a lender who understands the limitations of a manufactured home loan is a good choice for those looking for this type of financing.

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