Manufactured Home Financing

When talking about manufactured home financing, there are some criteria set by the lenders which need to be fulfilled by individuals wishing to get a loan. First and foremost, lenders want you to take out a loan that is within your ability to repay. Usually, they have varying formulas to make their calculations, but they can adjust their criteria depending on the amount of your deposit and the reliability of your income.

For assessing the security of their loan, lenders carefully examine your application as well as your individual profile, because both are important in assessing the risk factor attached with the loan. The amount you borrow and the term of the loan determine your monthly repayments.

Lenders consider how much your income can support in clearing up the loan payment. Most of the lenders work on a theory that your monthly housing expenses should be between 25% and 45% of your gross monthly income, so you can make the monthly payments with ease. Generally, leaders will take all your long-term debts into consideration. Long term debts are those which take at least one year to repay.

Luck also plays a crucial role here, because some lenders will be more flexible than others when it comes to deciding how much debt a borrower can have. So you have to identify lenders which are more flexible and suited to your needs. The flexibility factor depends heavily on your credit score and the percentage of the property price you need to borrow.

If you are a self-employed person and in desperate need of a loan, you will need to provide accounts for the last two years, or an accountant’s certificate depicting you are self-employed for the last two years. A bank statement for at least the last three months is also a necessity. Some lenders also ask for rental or mortgage payment histories for the last six months.

Home Finance

Owning a home is every individual’s dream. However, most people cannot afford to buy a home with savings of their own and need their purchase to be financed by a financial institution. A loan provided by a financial institution to purchase or renovate a home is known as home finance. Purchasing a home offers several advantages. Perhaps the biggest advantage is that it allows you to build home equity when you pay the mortgage each month.

It is a common myth that paying monthly mortgage payments is much more expensive than paying rent. Often mortgage payments may be less than the rent. Unlike rent, which might escalate each year or every few years, mortgage payments are usually fixed throughout their tenure. The interest paid on a mortgage payment is tax deductible. Also, you can take a loan against your home equity at attractive rates of interest and convert it to cash.

With the thought of buying a home, there arise many questions and doubts. The questions that one needs to think about include one’s purchasing power and the monthly payment that can one easily afford towards the home purchase. These are the main criteria that need to be considered. They help one decide the budget for the purchase of a home and narrow down the search to homes that fit in the budget.

You should also consider other initial and ongoing costs. These include a down payment, closing costs, home owners insurance, mortgage insurance, utilities, maintenance and property taxes.

Before beginning the process of looking for a home, you should figure out whether you are able to get home finance and an estimate of what you pre-qualify from a lender. Getting pre-qualified is an indication to the real estate agent that you are a serious and knowledgeable buyer.

5 Tips for Bad Credit Home Financing

1. Find a Good Deal on Your Home

You can start yourself on the path to home ownership by finding a good deal on a home. You may wish to consider looking in to foreclosures or other ways to purchase homes cheaply. Not only will this lower the cost of the home and consequently your monthly payments, but it will also be to your benefit to have equity in the property when you go to get financing.

Lenders look at a particular figure, known as the “loan to value ratio” in addition to other factors like credit when you apply for a home loan. Equity in the home will give you a more attractive loan to value ratio which will facilitate financing in many cases.

2. Creative Financing Options

Many times, alternative options are available to help those with bad credit own their own homes. If you are fortunate enough to find them, some sellers offer seller financing and rent to own arrangements.

If that is not an option, perhaps the seller would be willing to consider holding back a 2nd mortgage to assist with allowing you to present a higher down payment to the primary lender. A larger down payment will make it easier to get approved for traditional financing in situations where credit is an issue.

3. Hefty Down payment

While you see advertisements for 100% financing all over the place, this is not easy to get approved for if your credit is less than perfect. Every little bit you can save to go towards your down payment will help with lowering your interest rate.

In many cases, it is even to your benefit to wait to purchase a home if you will be able to save more and come to the table with a larger own payment in the near future.

4. Compare Mortgage Options

When you actually go to apply for the mortgage, you will probably hear a variety of different answers and be presented with a variety of different rates and terms from various lenders. Ultimately, there will be some lenders who can help you while others can not.

Amongst these lenders, the interest rates available and terms will vary. Shopping around for a better interest rate can save you substantial money over the life of the loan and is very much in your best interests to do. Luckily, there are many online services that make mortgage rate shopping an easy task.

5. Credit Repair

Before you go to actually apply for a mortgage, it would be in your best interests to take steps to understand and repair your credit score as much as possible. It is easy to order your credit report and get your exact credit score.

It is also a good idea to go over your credit reports and look for any entries that may be incorrect. You can then dispute incorrect items prior to applying for your loan. Even this small degree of attention to your credit prior to a loan application can make sure that you present your best possible credit score to prospective lenders.

By following these simple tips, you should be able to have the best possible opportunity to get bad credit home financing.