How to Qualify for a Mobile Home Loan
Qualifying for a mobile home loan is not all together different than qualifying for any other type of large loan. You will need to have a loan application that shows you are an attractive borrower based on your performance on past loans, your income and your debt to asset ratio. When you are seeking a mobile home loan, your strategy will be different if it will be your primary residence than if you are using the home as a second residence.
If You Have a Mortgage
Some people use a mobile home as a second residence. If you already own property, you likely have another mortgage. This is significant for a variety of factors.
- You have an asset for collateral - Once you have equity in a home, you can use that equity for collateral on additional loans. Using collateral will always make your loan application more appealing because it makes the loan less risky for the lender. You will save money on a secured loan using your home as collateral because you will get lower interest rates.
- You cannot take on too much debt - If you still owe a lot on your mortgage, it may be a negative asset on your balance sheet. A new lender will be unwilling to extend you financing if you have too much outstanding debt. You should not seek a mobile home loan, or any second residence, loan unless you have built up significant equity in your first residence.
- Your credit score will be dependent on your mortgage performance - Your mortgage is likely the largest loan you have ever taken. Your performance on that mortgage, more than any other loan, will affect your ability to get a new home loan.
If You Do Not Have a Mortgage
When you are using a mobile home as your primary residence, you will have to take a different approach to appear attractive to borrowers. Maximizing your application means taking into account the following factors:
- Your credit score - Your credit score is the first criterion any lender evaluates. If you have a score above 700 or 750, you will be starting off on the right foot. You should also assure you have no late payments for at least 2 years.
- Your assets - You may not want to collateralize your assets for a new loan, but showing you have assets will help build your financial profile with the lender. If you own a car, business or other assets, you can list these on your loan application.
- Your income - Your income will be a large factor in an unsecured loan. You need to show you can easily make payments by proving you have been consistently employed within the past few years. It is best if you have worked for the same employer and received several raises or promotions in your time with that employer.
- Your application - Your loan documents will be considered very heavily when you are not using collateral. This means you must prepare your application thoughtfully, neatly and professionally. Do not omit information, and ensure you always turn items in on time.