Get Preapproved for a Mobile Home Loan: A Step-By-Step Guide

Buying a mobile home can be an affordable way to become a homeowner. With mobile home prices typically lower than site-built homes you may be able to purchase a mobile home for significantly less.

But getting a mobile home loan is different than getting a traditional mortgage. You’ll need to find a lender that offers chattel loans or other financing options for mobile homes. And the loan process has extra steps, like finding a home that meets your lender’s requirements.

That’s why getting preapproved for a mobile home loan is so important. Preapproval can show sellers you’re a serious buyer and give you a better chance of having your offer accepted. It also lets you know the loan amount and terms you qualify for ahead of time.

Here’s what to expect when going through the mobile home loan preapproval process.

How Preapproval for a Mobile Home Loan Works

With preapproval from a lender, you can shop for mobile homes knowing your price range and loan terms upfront. Preapproval isn’t a guarantee you’ll get the loan, but it shows sellers you’re qualified.

Here are some key things to know about preapproval for mobile home loans

• Preapproval is based on a soft credit check: Lenders can preapprove you by doing a soft inquiry on your credit, which doesn’t impact your scores.

• You’ll get estimates for your rate and terms Preapproval letters estimate your interest rate, loan amount, and other terms you’re likely to qualify for

• You still must meet underwriting requirements later: Lenders do a hard credit check and verify income, assets, and other financial details during underwriting after you apply.

• Preapproval makes your offer more attractive to sellers: They know you’re qualified and ready to move quickly to close the loan.

• It’s usually good for 60-120 days: After getting preapproved, start your home search right away, since preapprovals expire after 60-120 days typically.

Steps to Getting Preapproved

Follow these steps when seeking preapproval for a mobile or manufactured home loan:

1. Check your credit reports

Before applying, pull your credit reports and check for errors that could impact your scores. Dispute any inaccuracies with the credit bureaus. This can boost your scores.

2. Save for a down payment

While some mobile home loans don’t require a down payment, having one ready can get you better loan terms. Shoot for at least 5% to 10% of the home’s purchase price.

3. Collect your financial documents

Lenders will want documents like W-2s, paystubs, and bank statements to verify your income, employment, assets, and debts during preapproval.

4. Research lenders

Find lenders like 21st Mortgage and Rocket Mortgage that offer mobile home financing. Compare interest rates and fees quoted for various loan programs.

5. Apply for preapproval

Choose a lender and complete their preapproval application. This usually starts with an online form asking for basic personal and financial details.

6. Get preapproved!

If approved, the lender will issue a preapproval letter detailing your estimated loan amount, interest rate, fees, and other terms you qualify for.

Now you can confidently start searching for mobile homes listed within your preapproved amount!

Tips for Getting the Best Mobile Home Loan Preapproval

Follow these tips when seeking preapproval for mobile home financing:

• Improve your credit scores before applying by paying down debts and disputing errors on your credit reports. A score of at least 620 is recommended.

• ** Lower your debt-to-income ratio** by paying down credit cards and other debts. Lenders may deny preapproval if your DTI exceeds 43%.

• Save for a larger down payment like 10% to 20% to get better rates and loan terms.

• Gather two years of tax returns to show steady income history. Provide recent pay stubs too.

• Shop lenders to compare rates. Consider credit unions and community banks in addition to national lenders.

• Get preapproved from multiple lenders to compare loan offers if you want leverage when negotiating your rate later.

• Lock in your rate after finding a home to avoid increases during the underwriting process. Most lenders let you lock your rate with the preapproval.

With some preparation, shopping around, and timely rate locks, you can find the best mobile home loan preapproval terms to fit your budget and goals.

What Do You Need for Mobile Home Preapproval?

Getting preapproved requires providing most of the same documents you’ll need later when formally applying for the mobile home purchase loan:

• Personal information like your name, date of birth, Social Security number, and contact details

• Your income sources and amounts, e.g. your employment and any other income

• Account numbers and current balances for all your debts, like credit cards, auto loans, and student loans

• Details on financial assets like checking and savings accounts and retirement funds

• Your desired loan amount, down payment size, and preferred home purchase timeline

• A list of properties you’re interested in, if you’re evaluating specific mobile homes

• Two years of W-2 tax forms and recent pay stub copies

• One to two months of bank statements to prove your income and assets

Providing documentation upfront during preapproval allows lenders to verify your financial situation. This helps them give you more accurate estimates for the loan amount, rate, fees, and other terms you qualify for.

Can I Get Prequalified for a Mobile Home Loan?

Prequalification is another preliminary step borrowers sometimes take before formally applying for a mortgage or mobile home loan.

With prequalification, you provide basic details about your finances verbally to a lender, without documenting income, assets, and debts just yet. The lender gives you a rough initial estimate of how much you may be able to borrow based on:

• Your reported income amount
• Estimated debts and assets
• Your desired down payment size
• Your credit profile (good, average, poor)

Prequalification takes just minutes and doesn’t require pulling your credit or providing financial documents. But the estimates are general ballpark figures, not firm preapproval terms.

Preapproval requires more upfront paperwork but provides preapproved borrowers with specific rate and loan offers in writing from lenders. So preapproval carries more weight when making offers, versus prequalification estimates.

What’s Better for Sellers: Preapproval or Prequalification?

As a buyer, being both prequalified and preapproved can show sellers you’re serious about purchasing their mobile home. But most sellers prefer buyers who have been preapproved rather than just prequalified.

Here’s why preapproval makes an offer stronger:

• More accurate terms: Preapprovals provide firm details on rate, loan amount, fees, etc. based on verified financial records.

• Stronger buying power: Preapprovals prove to sellers you’re qualified and have been fully vetted by a lender already.

• Faster closing: With preapproval paperwork finished, buyers can close loans faster after having an offer accepted.

While prequalification has some benefits, preapproval carries much more weight when negotiating a mobile home purchase. Take the extra step to get preapproved if you want the best shot at having your offer chosen by the seller.

Can I Get Preapproved for One Lender and Choose Another Later?

Yes, you can shop lenders and get preapproved from multiple ones before deciding who you want to do your full mobile home loan application and underwriting with.

Each preapproval completed gives you an estimate of the loan amount, interest rate, and terms you qualify for from that particular lender.

With multiple preapprovals in hand, you can compare options and choose the lender providing the best rate deal later when you’ve found a home and are ready to move forward. Some key benefits of shopping preapprovals include:

• Seeing loan offers from competing lenders side-by-side

• Identifying if you qualify for better terms with certain lenders

• Using multiple preapprovals as leverage when negotiating your rate

• Giving you a backup preapproval if your first lender has issues later

As long as your financial details haven’t changed, lenders will honor preapproval terms for 60 to 120 days usually. So you can shop confidently knowing your rate and terms are protected during that window.

Do Mobile Home Lenders Check Employment History for Preapproval?

Lenders do verify your employment history and income stability when reviewing a preapproval application. Expect them to request:

• Two years of W-2 tax forms to show steady past income

• One to two months of recent pay stubs to verify current income

• possibly a written Verification of Employment from your employer

• Self-employed borrowers may need to provide business tax returns and bank statements

Reviewing your income documents helps lenders determine you have enough ongoing income to afford the new mortgage payment. Significant gaps in employment or sources of income may result in denial of a preapproval.

Provide lenders with a written explanation for any employment gaps or income fluctuations in your documents. Major changes will