What's Involved in Financing a Mobile Home?

Dec 5, 2018

In a quick survey we conducted on Eau Claire, WI Homes for Sale and Rent Facebook group, getting financing was number 1 barrier to buying a home. 

We at Hillcrest Estates - Altoona, WI and Villa Diann have been selling a lot of new manufactured homes and watned to share what we have seen. They are similar to regular single family homes with minor differences. 

Financing mostly depends on three things - credit, income, and down payment. 

Credit

Most lenders prefer to work with buyers with 600, preferably with 700 score. We do have a lender who doesn't have minimum credit score requirement, but we require 15% down. It always pays to check your credit. We had a couple of borrowers who had mistakes in their credit report which dinged their score. They called the credit bureau and corrected it, increased the score, and got better loan term. For outstanding collections, you can arrange a payment plan. 

Income

A general rule is that you need to make three times the housing cost. 

Down Payment

Lenders typically require 5% to 15% down, depending on your credit and income. It can come from your savings, tax refund, gift, retirement account and other places. 

As you can imagine, if you are lacking in one area, you can supplement it with the other two - to an extent. 

It is also beneficial to talk to multiple lenders because each lender has its own criteria. For instance, we have a lender who only looks at 700+ FICO and has great rate. We have another one that doesn't have minimum credit score requirement, but we need to have 15% down payment. We work with several lenders so that we can find the best option.