Chapter 9 of 20
Credit and down-payment preparation
What lenders look at, and what is worth fixing before you apply rather than after.
1 min read
Lenders assess the same broad things here as anywhere: your credit history, your income relative to your existing obligations, your available cash, and the collateral itself. What differs is how much weight the collateral carries. A manufactured home is scrutinised more closely than a house, and its age, size, foundation, and location all affect what is offered.
Before applying, pull your own credit reports and read them. Errors are common and take time to correct, and a dispute in progress is worth far more than a dispute you meant to start. Pay down revolving balances if you can, the ratio of balances to limits moves scores faster than almost anything else, and avoid opening new accounts or financing a vehicle in the months before you apply.
On cash: more down payment generally means better terms, and on chattel loans the effect can be pronounced. But do not drain your reserves to maximise the down payment. You will want money available for the inspection findings, the first round of maintenance, and moving.
Get pre-qualified before you shop seriously. It tells you the realistic range, and in a community sale it tells the seller you are credible. Be aware that a pre-qualification is not a commitment, and that the home itself still has to satisfy the lender.
Key points
- Read your own credit reports early, errors take time to fix.
- Reducing balances relative to limits moves scores faster than most other actions.
- A larger down payment matters more on chattel loans than on mortgages.
- Keep reserves for inspection findings and early maintenance.
Watch out
Do not finance a car, open a store card, or close a long-held account while a home application is in progress. Each can move your profile at exactly the wrong moment.