Mobile Home Financing: Need-to-Know Facts
Posted on: August 28, 2015 by Aegis General
As financing is a major factor in purchasing a home, preparing a financial plan prior to home shopping is ideal. While manufactured homes can be financed through traditional lenders, the process varies slightly. In addition to financing, a Mobile Home Insurance Program can provide extensive property protection throughout the length of ownership.
A key factor to consider is remembering that a bank is always required to approve a loan. According to SF Gate, approved borrowers pay an interest rate that is based on their perceived level of risk such as low credit score and how much the homeowner wishes to borrow. If the potential homeowner’s credit score is extremely low, banks have the right to disqualify the applicant’s request for a loan. Further, the bank can also deny the loan if they believe repossessing the home would not be worth the financial gain in the event of a default.
Once the loan is approved, there are some inherent risks to owing a mobile home. As the real estate value is based off the land rather than the property, mobile home ownership can demonstrate value concerns. However, this housing option is a widely affordable alternative to typical homes. Further, if the land in which the mobile home is stationed allows for property ownership, the bank will view its decision to lend to the homeowner as much less risky. In turn, the homeowner might be eligible to qualify for a traditional mortgage.
In order to ensure the application’s approval, homeowners should check their credit ranking prior to applying. Further, saving for a down payment and collecting relevant documentation to prove the ability to pay the life of the loan can help the process run smoothly. Lastly, homeowners should research the availability of purchasing the land they wish to stay in.
Aegis General Insurance Agency offers comprehensive coverage for mobile homes to protect against a variety of risk exposures. To learn more about our operation and services, contact our specialists today at (866) 662-5752.