You’ve found just the perfect mobile home and total bliss awaits. But your credit isn’t so great, so you figure it’s time to brush up on loans types and credit scores. So we wanted to put together some ideas on how to buy a mobile home with bad credit.
As you begin, pause to remember that bad credit is just a phase, it’s not who you are or what you will become. Keep a smile on your face as you go through the extra work necessary to get a loan with less than perfect credit. The payoff is worth it.
Perhaps just as important as credit scores are the types of loans available to you as a mobile home buyer. Here’s how to tell if your dream mobile home may qualify for a real estate loan (mortgage).
Since many mobile and manufactured homes will not qualify for real property loans unless they are permanently installed, other means of financing will need to be considered. Homes that don’t qualify for real property loans
Sometimes it’s a bit harder to get a real estate loan on a single-wide, but persevere–you will find one. There is still chattel loans, personal loans, owner financing, or rent-to-own options.
Rent to Own Contracts
These are available for both real estate and chattel loans. After a period of time specified by the landlord/owner, and at a price agreed to by the landlord/owner and renter, the renter may opt to purchase the mobile home. The renter will then need to secure a loan. If you decide to go this route, be sure to search for and carefully read one or more rent to own agreements.
Make sure to research what your state’s maximum interest rate for rent-to-0wn and owner-financing contracts. Here in WV, it is 8%.
What is your credit score, and what does it mean? And what’s this FICO stuff all about? Your credit score is an assessment of how likely you are to repay a loan in a timely fashion. Most people seeking a loan will find their credit (FICO) score is between 350 and 800, although the possible range is 0 to 850. Here’s how lenders view credit scores:
So you’ve got a low score, maybe a really low score, is all hope lost? Of course not.
There is a right way and a wrong way to improve your credit score. You’ll want help fixing your credit even if it’s just in the form of information. If some outfit promises things like:
The plain truth is that your credit can be improved, but not instantly, and not without some work on your part. If you want to take a do-it-yourself approach to improving your credit then your first stop should be the Federal Trade Commission’s Credit Repair Help Site here. If you want help, locate an NFCC approved credit counseling service to guide you through the process.
Now go find your new mobile home and enjoy affordable living!
More resources on buying a mobile home that may be helpful to you:
Thank you for reading Mobile Home Living!
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My family and I are looking into purchasing a mobile home with a space lease, the problem is both my fiancé and I started low credit scores since we had our son a year ago (when you think everything is in place and ready, everything falls apart).
I have a home that was quit claimed to my brother and I, I’m not sure if that can be used as land collateral. Basically, my fiancé tried fixing his credit with help from some group and that’s not going well. Now me, I just have high balances but have not stopped paying my credit cards even though I’m a disabled stay at home mom.
We need a home soon and can no longer wait, every time we think we’re on the right track for our credit it doesn’t work out. So, we found homes that are below $50,000 and just need to get financed for them. We would love a low rate but would deal with a high rate if we must. Can we find something we can refinance later? Or, Can I use my land/ property as collateral and get a low rate? Is there someone out there that will approve us for 15 yr, hopefully a 30yr fixed rate with our current bad credit?
I’m anxious to get your advice and I thank you before hand.
Hi Ali,
I'm not at all knowledgeable about finances. I have to research for weeks just to write a short post. With what I know, I think your best option at this point is to go to a consumer credit counseling office (they are free) and get a good financial plan worked out so you can increase your credit score. If you have a low score and you do get approved for a manufactured home loan through a dealership you will probably end up with a very high-interest rate and that's not good. You could end up paying $250,000 for a $60,000 home.
For an FHA backed mortgage (backed by the government) you only need a 3% down payment and a credit score of 580. However, you can't buy manufactured homes or condos in this program. Mortgages through private loan companies require a 620 or 640 and above. You also need a good down payment (5% minimum usually) but they may finance a new manufactured home.
You could probably go to a Clayton Homes dealership and get financed or you could work on getting an FHA loan and choose a site-built home instead. Sometimes, manufactured homes aren't a good option. This may be one of those situations. You can go with FHA with lower credit score and lower down payment.
Best of luck! Let me know how it goes.
I had very bad credit when I bought my mobile home in 2005. From a inheritance I put $8K down on a 2003 single wide repo priced at $32,900. I had an interest rate of 12.25%, very high. My credit score has gone up immensely since I've never been late or missed a payment, but it's irritating that my mortgage co would not refinance to a lower rate. I bought from a repo outlet and they found the financing for me. I had no experience or advice when I did this, I wish your site would have been around back then. I've learned a lot from it, so if I do this again, I'll be better prepared.
Barbara,
I can pay cash for the mobile home but i'm worried about the lot fees. I have bad credit and am not empolyed but did receieve a large 501K. Did they ask for a credit check etc. for the lot fees?
Thank you!
Hi Barbara,
I have heard so many stories of finance companies promising people that they can refinance their manufactured homes at a lower interest rate in a couple of years. It's a blatant lie and every one of those salespeople should be fined or fired. It's stuff like this that makes us despise the industry so much. I'm terribly sorry you were done like that - if you can, pay as much on that loan every month as you can. Every little bit helps and will save you a bit of interest at least.
Thanks for reading Mobile Home Living!Best of luck!
I am looking to purchase a used mobile home for 12,000 or less but I will need to finance it. I have poor credit and am currently do not have an account with any financial institution. How would I go about getting a loan based on these details. I am able to put %20 down and completely pay it off in less than a year. I take 2000 - 2500 a month. Please let me know my options thank you.
Hi Dallas,
We don't sell or finance mobile homes, we just write about them. However, I can give you some tips cause I was in a similar situation (though I am not a professional of any kind). My first tip is to go to Capital One Bank Services website and get a secured credit card. You will have to give them a deposit of $200-400 and that will be your credit limit. Use the card and pay it off every month. This will help you establish a credit record.
To get financing for a used manufactured home you will either need to go through a dealership and pay higher interest rates or you may be able to get a private loan or chattel loan through a private bank. It would likely need to have collateral of some sort (land usually). These places don't really like used homes but if you own the land it will sit on you will have an easier time.
Best of luck! Let me know how it goes.
I have found a mobile I'm really interested in buying..but my credit is in need of improvement. .I'm working with a law group in repairing it..Im buying a car I purchased in June. .how do I go about buying this mobile home..before it sells..it's a steal at 25000 the buyer priced it for a quick sale due to them wanting to build a house on the lake lot.
Hi Karrie,
You are doing all the right things. Working with credit experts is a great way to get your credit up. I've been trying to raise my score as well but it is a very slow process. I've read that you need a long term relationship with your bank (preferably a local bank or credit union), the longer you've done business with them the easier it is to get approved for loans (in addition to the credit score, down payment, etc.). Google manufactured home financing in your town and you should be able to find a good starting place.
Best of luck!
Here's the deal. I have land but my credit is bad and I can't as much get a personal loan and i have tried manufactured home lots and am turned down left and right. I have about 20000 to put as down payment. Coulee u help guide me in the direction I need to be please. I'm desperate at this point.
Hi Patricia,
I would think with that kind of down payment and the ability to use land as collateral you would be able to find some kind of financing (even if it was high interest). I would go to a consumer credit counselor and have them help you. They can help you raise your credit score and may be able to help find you a financing company.
Best of luck!
Hello,I log on to your new stuff named "How to Buy a Mobile Home with Bad Credit" like every week.Your writing style is awesome, keep doing what you're doing! And you can look our website about love spell.
Wow! Thanks!
Hi. My credit score is horrible and I want to get a repo mobile home with no credit check or a huge down payment. But I'm willing to pay monthly. I need this ASAP, please help
I'm interested in buying a modular home I don't know who to go to with my credit away stands I like to get one soon if you can help I appreciate it
Hi David,
A modular home is completely different from a manufactured home and I am not knowledgeable about them. Modular homes are built in sections in a factory and installed together on site. They must pass local regulations and codes. Manufactured homes are built completely in a factory on a chassis and only need to pass a national code. Modular homes receive the exact same financing as a site-built traditional home whereas manufactured homes are often relegated to high-interest loans, chattel loans, or even personal loan financing.
That's all I know about modular. Best of luck!
I'm considering selling my house and downsizing to a manufactured/mobile home. I have an IRS lien on my house due to a messed up inheritance from my deceased husband along with bad tax advice. Otherwise my credit score would be in the 700's if that lien wasn't there. The only way out of this IRS "spider web" is to sell the house and satisfy the lien. Since my husband passed 3 years ago, I will not be able to afford a single-family home and I would not want to go back to apartment living. As of now a mobile home is all I can afford with my income. After the house is sold and the lien is paid, I will have very little equity left and may be able to make little or no down payment.
Hi..I look for a mobile home..but my credit.is 630 score..and 21 financial for 9.7% /21 years and 10% dawn...your recomend buy the mobile is new and its 1700 sq. What you recomend for me?
Hi Blanca,
I always recommend that buyers try to go through a private bank or credit union and get approved for a mortgage or even a personal loan first. If that doesn't work and you're comfortable with paying higher interest rates and losing the ability to refinance then a manufactured home dealer would be the next possibility. The larger dealers like Clayton have their own in-house finance companies and can get people financed that likely can't get approved through banks. Make sure to read every word in the contracts before you agree to anything and do not sign anything until a 3rd party has reviewed it - not even a permission slip to pull credit.
best of luck to you! Thank you so much for contacting me!
Hi, my family and I are in need of a new mobile home,,ASAP.The mh we're currently living in is very old. We have our own land and money to pay down, even trade this one in, but both of us have credit issues right now. Is there any way u can be a help to us we would greatly appreciate it.
Hi Stephanie
I'm just a blogger that writes about mobile homes but you should be able to contact a local manufactured home dealer and they should be able to help you. Just type in your town and state and buy manufactured home into a Google Search bar.
Best of luck!