Pride of ownership. That is the first phrase that comes to mind when most people are asked about what it feels like to own their own home. Mobile homeowners are proud to have a place to call their own. It allows them to get off of the renting treadmill while giving them the chance to build up an investment asset over time as they pay down their mortgage loan.
These days, everyone should be looking for ways to reduce their monthly expenses. When money is tight, the ability to shave even a few hundred dollars per month off of one’s expenses is seen as a welcome opportunity for mobile homeowners.
A smart way to accomplish this kind of reduction in monthly expenses is through refinancing the mortgage on your mobile or modular home. Refinancing simply refers to the taking out of a new loan while paying off the existing one completely. It only makes sense to refinance if you can qualify for better loan terms that either reduce the monthly mortgage payment, reduce the total interest paid over the life of the loan, or both.
But, what if you have a bad credit score – are mobile home refinance loans still possible? The answer is yes if you know how to go about it.
If you are wondering how to refinance mobile home loans for people with bad credit, here are 5 tips for how to get approved:
1. Get a sense of the current appraisal value of your home:
Refinancing is only possible if you owe less on your home than it is worth. Start by getting an informal (free) or formal (fee-based) estimate on the current value of your home. A Realtor friend of yours – or maybe the manager of your mobile home park – may be able to give you an informal appraisal. For a formal appraisal, contact a professional appraiser.
2. Determine exactly how much you owe on your existing mortgage, as well as what your current mortgage terms are:
Now, call or e-mail your bank – or check your most recent mortgage statement – and find out exactly how much you owe on your existing mortgage. Also, check your current mortgage’s interest rate and repayment period (e.g., 15 years, 30 years, etc.).
3. Identify at least 3-5 bad credit mobile home refinance lenders:
Next, talk with neighbors, go online and check with your current bank to identify at least 3-5 “bad credit mobile home refinance lenders.” These lenders advertise themselves openly as such. Also, you can look for “bad credit refinance lenders” who do NOT specialize in mobile homes, as well. Most of them will also refinance mobile home loans.
4. Get a baseline to refinance quote:
Apply for a refinance loan with just one of the lenders. We will call this your “baseline” quote because you will use this first quote as a reference point for the rest. Since you will only have a sample size of one at this point, do not be disappointed if the first quote you get does not have the favorable loan terms you were looking for. At this point, you just need something to use for comparison purposes as you seek out more loans.
5. Establish your “number to beat” interest rate and contact the remaining lenders:
Use the interest rate offered to you via this first refinance quote as the number you will want to beat with the quotes from the remaining lenders to which you apply. Make sure to apply to all of the lenders you found during step #3 above: it is quite likely that the 4th or 5th one you contact will offer you the best rate of the bunch.