Preparing for a California Mobile Home Mortgage

Getting approved for a mortgage is the first step to homeownership, but there is some preparing that every aspiring homeowner should do before they begin applying for those loans. For those wanting to finance a mobile home, these preparations may become even more important depending on the type of financing they plan to use. In this article we will discuss what you should do to prepare for a California mobile home mortgage.

Mortgage loan programs in California for those buying a mobile home can be difficult to come by. The three best ways to find financing for your mobile home purchase include:

1.     Specialty lenders who lend exclusively to those purchasing a mobile home.

2.      Paying your retailer in installments instead of one lump sum, otherwise known as a Retail Installment Contract.

3.      Getting a Title I or Title II loan through the FHA.

The Issues

The problem is that 2 of these 3 options come with their own issues. First, interest rates for mobile home loans can be very high due to the loose regulations imposed on this industry. This is something that you must prepare for financially when thinking about taking out a mobile home loan.

Secondly, a Retail Installment Contract may come with much higher payments than a California mobile home mortgage through a specialty lender. This is because your retailer may not want to wait several years to receive all of his payments. If you end up financing your new mobile home through this option, you will have to prepare your budget for a potentially high payment.

The Solutions

The first thing you should do is make sure your credit report looks as good as possible so that a high interest rate mortgage does not turn into a very high interest rate mortgage. You need to check all three credit reports (Equifax, Experian, and TransUnion) for you and every person who is applying with you. You need to make sure that there are no bad marks or accounts reporting that are over 7 years old, that no paid collection accounts are still reporting as unpaid, and that all the accounts on your report are actually yours. If you have any lates, you can send what’s known as a “Goodwill Letter” to the lenders to see if you can get some of those removed. Getting these issues taken care of will help raise your credit score and help get you a lower interest rate.

The second thing that you should do is make a financial plan to prepare for a big payment just in case you need to go with a Retail Installment Contract. To do this you should try to live without the income for 3-6 months and see if it is doable. If not, then you know that now is not the right time for a California mobile home mortgage. But if so, then you know that you can get your new home AND you will have all that money saved up for your down payment.

Now that you know your options, the possible issues, and the solutions to those issues, it is time to find out what type of financing you can secure. Remember to go in with an open mind and it will make your hunt much easier.