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In the Market For a Manufactured Home? Here’s What You Need to Know About Your Credit Score
Financing a manufactured home purchase can be a long and challenging process – though at Ma Williams we’ll be with you at every stage to answer questions and provide guidance toward getting the best deal possible.
Several factors will impact the financing terms available to you – one of the most important is your credit score. Lenders use that score to determine whether you are qualified for a loan, the interest rate on the loan, and how much you’ll need to raise for a down payment.
Here’s where it can get confusing: there are three companies that provide credit scores to lenders – Experian, Transunion and Equifax. In almost every case each one will provide a different number, so lenders throw out the highest and lowest and use the middle score.
“Great,” you say. “I’ll just run a report on myself so I know what my score will be before I get started.” But the problem is lenders don’t receive the same numbers that you do. They may use specialized scores calculated differently depending on the type of loan you are seeking, or they can run a “residential mortgage credit report” that provides additional details about your financial life, such as your rental history. Some lenders even use a proprietary credit score that’s developed for use by just that company.
Still, the number on your credit report should provide a general idea of where you stand. For a conventional construction loan, the minimum accepted score would be in the 660-680 range, depending on the amount of the down payment. For an FHA construction loan, a minimum score of 640 might be sufficient, though most are closer to the average of 680. Also keep in mind that with FHA, a lower score may require a higher down payment. A VA construction loan requires a minimum credit score of 640, but these are available only to those in military service and veterans.
Questionable Credit? Now May Be the Time to Buy
Because COVID has driven interest rates to historic lows, credit scores may have less of an impact on your loan rates than in a typical economy. But with virus numbers falling and the economy gradually improving, that may not be the case for much longer.
Can You Improve Your Credit Score?
There are many ways to get your numbers up, and they are what you’d expect – pay down existing debts, particularly high-interest credit card balances, pay your bills on time, and don’t open any new accounts. If you’re lucky, you may also boost your score by finding something on your credit report that doesn’t belong – credit bureaus make mistakes too.
If you think you’re ready to purchase a manufactured home, talk to a Ma Williams representative. We’ll be happy to discuss your situation and how we can help you acquire the home of your dreams.
