How much you can borrow (and whether your application is approved at all) will partly depend on you. Lenders will want to be sure:
- You can afford the loan – That you have sufficient income to make payments and don’t have too many other debts.
- You are a responsible borrower – You have a decent credit score. Find out your credit score and how to improve it using the LendingTree credit score service, which is 100 percent free.
- You have an appropriate down payment – At least 10-20 percent of the appraised value of the home and lot.
Your New Home
The lender will also want to make sure the home itself complies with its standards. Different lenders have different requirements, but the following are common:
- Built after June 15, 1976.
- Minimum 600 square feet of living space.
- At least 12 feet wide.
- Wheels, axle, and hitch removed.
- Unit permanently affixed to the site.
- Anchoring of unit to site compliant with regulations.
- Permanent foundation compliant with manufacturer’s code or qualified engineer’s plans.
- Designation as real property.
Those are the minimum requirements specified by Freddie Mac, and individual lenders may have more, fewer, or different criteria.
Mobile Home Loans for Leased Land
If you are leasing your land, it is less likely you will be able to get a mortgage. However, Federal Housing Administration (FHA) Title 1 loans may be available to those with leased plots, providing that lease is for three years or longer, and the minimum notice period is six months. Learn more at HUD’s website.
If a Title 1 mortgage does not work out – and assuming you cannot pay cash – you will need to seek out a good deal for a chattel/personal loan. Those buying on a park may get a sales pitch from a representative that includes financing options. You should be ready to resist pressure to sign up immediately for such a loan.
Shop Around
Of course, it is possible to get a great financing deal from a park owner, just as it is possible to get a good auto loan from a car dealership. But many (perhaps most) such sources offer significantly more expensive loans than you can find elsewhere.
So be sure to shop around. Get multiple quotes for personal loans from a variety of sources, including online, banks, credit unions, lenders that specialize in mobile home loans, and any not-for-profit lenders that operate in your area. If, in the end, it turns out that the park’s finance package is the best deal, you can still go with it. But at least you will know you are not getting ripped off.
Again, your credit score is likely to play a big part in determining how low an interest rate you will be offered. Someone with a great score might get a rate of around 6 percent, but if yours is below average you might pay 10 percent or even more.
