How does my credit score affect getting a mobile home loan?

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When you apply for a manufactured home or Mobile Home Loan, your credit score is one of the main factors that lenders must review if they are going to approve your mobile home loan or decline the loan. Also affecting the approval process is your income, savings (including personal savings and retirement accounts such as IRA's) and if you have any other assets such as stocks, bonds, or other assets.

Your credit score doesn´t just affect your potential approval for a mobile home or manufactured home loan but it is also the chief deciding factor that determines the interest rate you will be able to obtain from the mobile home or manufactured home lender. The lenders have what is referred to as a "rate sheet" which has a range of credit scores and the corresponding interest rates for the mortgage alongside it.

The higher your credit score, the lower the interest rate you will obtain from the lender for your mobile home or manufactured home loan. A higher credit score indicates to the lender that 1) you are less likely to default on your home loan, 2) you will be making your mobile home or manufactured home mortgage payments on time and 3) they will see a return on their investment in the long run.

If you have a credit score on the lower side of the spectrum, it shows the lender that you are a higher risk to finance for a mobile home purchase, and the lender may wind up having to foreclose on the manufactured home, which is an instant red flag for the lender. In turn, the lender will increase your interest rate to offset this risk and see a higher immediate return on your mobile home loan in the form of the interest paid.

In this currently harsh economic climate, there has been somewhat of a dramatic raise in the standard for credit scores, which has made it more difficult to obtain a manufactured or mobile home loan. What was once being considered as an "above average" score, a 660 is now the MINIMUM for many lenders to underwrite a manufactured home and mobile home loan. This is why it is the best idea to raise your credit score to the highest possible rating before you decide to make an application for a mobile home or manufactured home loan. If you wait for a higher score to build, you will obtain a much lower interest rate (which translates into a lower monthly payment, as well).

There are many avenues you can pursue to achieve a higher credit score, an increase you chances to obtain a manufactured home or mobile home loan. Contrary to popular belief, debt consolidation firms and credit counseling services can often – in the short term – harm your credit score and the potential to obtain new credit. Simply making your payment deadlines, paying more than the minimum payment, and slowly paying off your existing debts can work quickly to raise your credit score and improve your chances of securing a manufactured home loan or mobile home loan in the future.

Very few people actually know the formula that results in a person´s credit score, but the facts about how to increase it are very accepted, and if you want to be approved for a manufactured or mobile home loan then you must follow these rules. First, it is very important not to make any late payments. If you accidentally make a late payment, then just call the credit company, and ask them not to report it and they will usually just make an internal note and not give you a "ding." Just don´t let it happen again. Another important rule to live by is that you can´t have too much debt as a ratio to your total credit. This is basically a ration that shows whether you have maxed out your credit cards, or use them responsibly. Also, when you apply for a mobile home or manufactured home loan, your credit will be pulled. Having your credit pulled frequently lowers your credit score, because it gives the appearance that you are desperate for more credit, which is very bad. This makes it a very bad idea to apply for a credit card right before you apply for a manufactured or mobile home loan.