Refinancing your Colorado Manufactured Home
Manufactured home loans - Facts you need to know before refinancing
Although a manufactured home loan might seem to be different but actually the entire process of grabbing such a loan isn?t much different from getting home loans for traditional homes. Manufactured home loans are taken out for financing the mobile homes and the conventional home loans are opted for buying the conventional properties. If you had taken out a mobile home loan and you are struggling to make the payments towards it, you must be thinking of a refinance. Through a refinance home loan, you can take out a new loan with new terms and conditions and thereby facilitate the entire debt repayment schedule. With the current low mortgage rates in the nation, this is perhaps the best time to opt for a refinance as it is possible to save a large amount of money. If you?re wondering about a refinance mortgage loan and the facts that you need to know before you refinance the loan, here are some facts that you need to consider.
Do you have enough equity in your home?
The first consideration that you need to take into account is whether or not you have enough equity in your home. Refinancing is never possible without enough equity in the home and so when you see that you don?t have the required equity in your manufactured home, you shouldn?t opt for a home equity loan. Accumulate enough equity in your home so that you?re not subject to rejections after you reach your mortgage lending company.
Do you have a stellar credit rating?
The next consideration that you need to take into account is your credit rating. If you don?t have a good credit score, you won?t be able to grab a mortgage loan within your means and this might affect your repayment ability. Therefore, before you obtain a mortgage refinance loan from a lender, it is better to order a free copy of your credit report so that you know what is there in your report. Take the required steps to increase your credit score by establishing positive credit history and grabbing a home loan for your mobile home.
Do you have a low DTI ratio to qualify for the loan amount?
When you?re in the market to take out a mortgage loan, you should also be aware of the fact that apart from your credit score and home equity, the lender will also check your DTI ratio or the debt-to-income ratio. This is nothing but the ratio between your total debt amount and the total income that you?ve earnt. The lenders usually demand a low DTI ratio as this makes them feel that you will be able to repay your mortgage loan on time. If you have a high DTI ratio, the lender will assume that you have too many debt obligations in accordance with your income and therefore you might default on the mortgage loan due to lack of cash. Therefore repay your debts beforehand and lower the ratio in order to stay on the right track.
Did you save enough money for paying down the right amount?
Last but not the least, there?s another fact that you need to know about refinancing your mobile home loan. Your lender will demand a downpayment of 20% of the loan amount if it?s a conventional refinance loan. And in case your refinance mortgage loan is backed by the FHA, you can even pay down as low as 3.5% of the total loan amount. If you?re not able to pay down the total down payment while getting the loan, you might have to qualify for the PMIs or the Private Mortgage Insurance premiums. Therefore, make sure you?ve saved enough money to pay down the right amount in order to get the best and the most affordable deal.
So, if you?re wondering about the facts to remember while refinancing your manufactured home loans, you may take the above mentioned facts into account.
This article has been contributed by Sam Stokdale, a financial writer specializing in mortgage. Immersing himself with the financial sector, he has covered topics including real estate investment, lending and borrowing, managing finances and credit advice.