Manufactured Home Loan and Bad Credit Mobile Home Loan are Different

Whenever there is question of getting a home loan, the common view is about the traditional home loan. However, there are also two other types of homes that are coming into use more and more because of the constraints of land and space for making traditional homes. These are manufactured homes and mobile homes. While bad credit is a constraint on the way of getting loans, it is not different In case of mobile home loans. However, bad credit mobile home loan is a little different from traditional manufactured home loan.

Basic Difference

Basic difference between manufacture home and mobile home is that the former is constructed in factories guided by the safety standards that are imposed by the United States Government in Housing and Urban Development Department and manufactured homes that were constructed before the 15th June, 1976 are known as the mobile homes. Credit score will come to play important role in the process and bad credit mobile home loan.

Mobile Home Loan Features

Some of the features of mobile home loans are as follows.

• Mobile home and manufactured home are the names of the same home;
• Chances of getting loans for the homes that were constructed prior to 15th June, 1976 are brittle;
• Reasons for such situation is that lenders want the house to be constructed in conformity with the guidelines of the Housing and Urban Development department; and
• Finances could be more easily available for the houses manufactured after 1976.

Manufactured Home Loans

When it comes to loans for manufactured home, such loans are available only for the purpose of buying such homes. It also involves buying the lot where it would be installed. Of course loans for buying the home and lot together are available but the condition is that the owner must install the house on the lot within a period of six months. When only the manufactured house is purchased, the house will be placed in the mobile home park and the lease on the home should be extended for a period of five years beyond the term of the loan in such cases.

Bad Credit Mobile Home Loan

Any lender will always look at the credit record of the prospective borrower before sanctioning any loan and it applies to the bad credit mobile home loan as well. Even in case of the mobile home loan the following factors will come into play.

• Credit score of the prospective borrower;
• Down payments for obtaining the loan or the home; and
• Debt to income ratio of the borrower.

Scores of 620 or above, down payment of 5%-10% and the debt to income ratio of 31% or lower is ideal for sanction of the loan. But when someone has bad credit record with a score below 620 or has debt income ratio more than 31%, the down payments will automatically go higher and may reach the range of 15%-30% depending on the rating of the borrower. Similarly, the normal repayment terms of 15-30 years may be restricted and the interest rates would be higher as well.