Mobile homes, also called manufactured homes, are considered lendable properties so long as the borrower owns both the title to the home and the title to the land on which the home rests. If you have bad credit and a mortgage in need of a refinance, you may have a tough road ahead. Restrictions on mobile home lending are already quite stringent--with poor credit your chances are further damaged. With extensive research and a willingness to pay more in fees, though, you can get a refinance.
Pull a current copy of your credit report. Visit the site listed in Resource #1. This is Annual Credit Report, a federally-mandated site that gives all American consumers a free copy of their credit reports. You should also pay for your FICO score. This three-digit number will give you a solid understanding of your own creditworthiness. Excellent scores are above 720; poor scores are below 600.
Make sure your mobile home and land meet the standard qualifications. The mobile home must have adequate hook-ups for water, sewer and electricity. You may want to get a certified inspector to review all the bullet points required for a mobile home refinance.
Calculate the loan-to-value (LTV) ratio of your mobile home. This is a ratio lenders use to determine how much of the equity in the property is being utilized. To determine your LTV, divide your existing mortgage by the appraised value of the home and land. Most lenders, especially FHA-insured ones, will not lend on properties with LTVs higher than 70 percent. With poor credit, your LTV may need to be as low as 50 percent.
Research lenders. Begin with FHA-approved ones. These lenders have the backing of the federal government. Look for lenders who cater to sub-prime customers. These lenders are called finance companies. Examples of finance companies include: Wells Fargo Financial and CitiFinancial.
Apply at a variety of lenders. Make sure to highlight positive aspects of your application. These can include: a low LTV, a low debt-to-income (DIR) ratio, plenty of other assets (investments, collectibles) and a long residence or employment history. With a little luck and good reasons for credit problems, these factors may help outweigh your poor credit score.
Review any loan offers carefully. Even with a poor credit history, you need not and should not accept unfair and predatory charges. Make sure any new loan you undertake is financially beneficial.
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