For those people put there with bad credit standing who wish to purchase or refinance a mobile home (assuming it’s to be installed permanently and at the owner’s lot), there is available financing. This type of financing is unique so look for a lender that has experience with bad credit loans so that you get good advice and an idea of what to look for.

These type of bad credit loans are commonly referred to as subprime mortgages and this is one reason why the housing market is in the mess it is. While many lenders will only work with individuals with a good credit rating, there are some institutions that will lend to people who are not as fortunate or have made bad financial decisions in the past.

What is considered a poor credit rating?

As far as the mortgage market goes an individual with a credit rating less than 620 will be considered having poor credit, and this will make securing financing for a mobile home much more difficult. However, the lenders that do lend to borrowers with less than perfect credit will make sure they limit their risks by charging a very high interest rate.

As with all bad credit loans, you will have to expect that the interest rates will be much higher than that of a traditional mortgage and will be offered with either fixed rate mortgages or adjustable rate mortgages (ARM). Many professionals advise to first pull a copy of your credit report from one of the three main credit bureaus before applying for a loan. You are acquired to one free credit check a year.

From the FTC:

“The Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months. The FCRA promotes the accuracy and privacy of information in the files of the nation’s consumer reporting companies. The Federal Trade Commission (FTC), the nation’s consumer protection agency, enforces the FCRA with respect to consumer reporting companies.”

By pulling a copy of your report you can see in detail all of the debts you have acquired. If you happen to find a mistake on your report, you can send a dispute letter to all three bureaus to get the negative mark removed, and in exchange possibly raise your rating.

How to get approved for this type of loan?

For you to get approval for these loans you will have to prove to the lenders your income stability and that you have the ability to provide the monthly payment. One can also apply for a home equity loan so they can use the property as collateral just in case they fail to repay the mortgage. This will help reduce the risk on the lenders behalf and make it that much easier to secure the loan.

There are many lenders out there today that are willing to lend to people with a poor credit history. Whether or not the borrower will be approved will depend on the lender’s view of their financial situation.  Therefore, a potential buyer should shop around for the best deal before closing the deal.

Moe Bedard
My name is Maurice "Moe" Bedard. I am the founder of America's #1 Mortgage Forum, My online work has been featured in the New York Times, LA Times, Fox Business, and many other media publications.