June 15, 2016
Home Loans – Show Me The Money!
Here’s a valuable list to help you get “first date ready” and put your best foot forward when applying for a new manufactured home loan.
It’s simple . . . plan ahead and clean up your finances before shopping for a home and applying for a loan. You’ll greatly improve your chances on getting – not only approved – but approved with the best terms and interest rate out there. Follow these steps and the manufactured home lenders will be begging for your business!
icon-home Develop a Family Budget
Instead of budgeting what you’d like to spend, use receipts to create a budget for what you actually spent over the last six months. One advantage of this approach is that it factors in unexpected expenses such as car repairs, illnesses, etc. as well as predictable costs such as rent. Postpone Disney – the mouse be still be there long after you’re in your new manufactured home. Stop shopping and eating out on a daily basis. The money saved on the daily drive thru can pay down your credit card debt. Think before you spend! There’s plenty of free information on the internet to help you budget for a new manufactured home loan – Dave Ramsey is a great overall resource.
icon-home Reduce Your Debt
Generally speaking, lenders look for a total debt load of no more than 43 percent of income. Since this figure includes your mortgage, which typically ranges between ranges between 25 and 28 percent of income, you need to get the rest of installment debt—car loans, student loans, revolving balances on credit cards—down between 10 to 12 percent of your total income. Get creative – have a garage sale. Put that boat on Craigslist. Barter for services instead of going into more debt (haircuts, lawn care, car repair.) Put a temporary halt on expensive hobbies – goes for you and the kids. Spend that extra time generating more income to knock down the debt and build your down payment.
icon-home Get a Handle on Expenses
You probably know how much you spend on rent and utilities, but little expenses add up. Try writing down everything you spend for one month. You’ll probably see some great ways to save. Get your priorities in line. What’s more important to you – a beautiful new quality built home for you and your family or immediate gratification on a throw away product – such as numerous meals out each week? New car and truck payments keep clients out of home ownership more times than not. Unless you plan on living in that new car or truck – forget it, don’t even venture onto the car lot – it’s too tempting.
icon-home Increase your Income
It may be necessary to take on a second, part-time job to get your income at a high enough level to qualify for the home you want and build your down payment. You will have to be at a part-time job for 24 months before it is considered as steady income, and it will have to be verifiable by W2- 1099 and/or tax returns. Or if a “side hustle” you can build your cash down payment if not needed to qualify from an income standpoint.
icon-home Save for a Down Payment
Although it’s possible to get a mortgage with only 5 percent down—you can usually get a better rate and a lower overall cost if you put down more. Shoot for saving a 10 percent down payment. Your down payment can include cash, trade, and/or land. As an independent, locally owned and operated dealership, Affordable Homes of Crestview can work with you to secure a sufficient down payment. We accept trades on most items of value – cars, trucks, mobile homes, boats, RV’s – you get the picture.
icon-home Create a House Fund
Don’t just plan on saving whatever is left toward a down payment. Instead decide on a certain amount a month you want to save, then put it away as you pay your monthly bills. Additionally let friends and family members know your intention to save for a new manufactured home and ask that a cash gift be given instead of presents on birthdays, holidays or life milestones. They can also “gift” your overall down payment when you are ready. Just let us know! You’ll be amazed at how willing your loved ones are at helping you live your dream.
icon-home Keep your Job
While you don’t need to be in the same job forever to qualify, having a job for less than two years may mean you have to pay a higher interest rate, particularly if you changed career fields. You will need to prove your income by pay stubs and W2’s, 1099’s and/or Tax Returns. Be prepared to explain any job gap over 30 days – examples would be for job training, school or caring for family/dependents. We also have a great program for applicants who are self-employed, independent contractors, or have cash based or tip based jobs (servers, construction, off-shore, etc)
icon-home Establish a Good Credit History
Most lenders look for 24 months of established credit history – credit cards, auto loans, student loans, etc. all of which contribute to your overall credit profile. Be certain to make payments by the due date and pay off the entire balance promptly. Do the same for all your other bills, including phone, utilities, medical bills and child support – as all will be reported to the credit bureaus. If you run into difficulty – do not ignore the hardship – contact your creditor and make payment arrangements at the first sign of trouble. Check your credit report periodically for accurate reporting. Another option would be securing a co-signer if you make a good income but have limited credit history.
Rest assured, we have access to the nations most competitive manufactured home lenders as well as the knowledge, experience and dedication to get you into your dream home with the best financing available. We’ll stake our reputation on that!