Believe it or not, mobile home loans are one of the trickiest types of loans out there! We wanted to create a resource that people could use to find out what type of loan is going to be the best for their current situation.

Before we get too far into this explanation let’s cover the two basic types of loans that people generally use to purchase mobile homes:

1. Mortgage Loans
2. Personal Property Loans

Mobile Home Mortgage Loans

In order to qualify for a mortgage that can be used to buy a mobile home, you will need to own the land that the home will be on. You will also need to have a foundation under your home – it needs to be permanently attached to the ground. This means that the wheels and axels will need to be removed.

If you own the land where your home is and it has a permanent foundation, you can approach any lending institution for a regular mortgage loan.

Personal Property Loans

These loans can be used if your home sits on a rented space or if it doesn’t have a foundation. There are plenty of lenders who are set up to provide this type of loan. When you buy your mobile home they will probably want to put you in touch with a lender of this type.

Choosing The Best Option For You

If you can qualify for a mortgage loan, this is almost always going to be the best option. The interest rate will be lower and the terms will be better. I personally would only use a personal property loan if the mortgage option didn’t work for me.

Getting Mobile Home Financing With Bad Credit

In order to qualify for this type of loan with bad credit, you will still have to have a FICO score that’s above 550. If your score is between 550 and 620 you can expect to pay interest rates that are much higher than you would pay otherwise. If you’re between 620 and 650 you will qualify at most banks but will still be offered sub-prime interest rates.

Those that have a credit score above 720 will get the best interest rates.

The lending institution will also look at your income level to determine whether you can afford to pay for the loan.

Improving Your Credit

As always, I would highly recommend improving your credit even if you already took out a mortgage loan with your current credit score. That way in the future you can do a bad credit mortgage refinance and reduce your monthly payments. Many people don’t know that you can improve your credit score by as many as 255 points by simply paying off your credit cards. The score increase can be reflected within a few short months.