Mobile Home Debt To Income Explained

Your Debt To Income Explained

Debt to Income Ratio

With manufactured home loans, your debt to income ratio is simply a way of determining how much money is available for your monthly mobile home mortgage payment after all your other recurring debt obligations are met. In some states we may be able to qualify you inder a stated income program (that is we "state" your income) however these kinds of programs are for land/home transactions).

Debt limit

There is generally a debt limit associated with each type of loan, such as a 28/36 qualifying ratio for a conventional loan. These qualifying ratios are guidelines. An excellent credit history can help you qualify for a mortgage loan even if your debt load is over and above the limit.

Understanding the qualifying ratio

Typically conventional mobile home loans have a qualifying ratio of 28/36. Usually an FHA loan will allow for a higher debt load, reflected in a higher (29/41) qualifying ratio.

The first number in a qualifying ratio is the maximum percentage of your gross monthly income that can be applied to housing (including loan principal and interest, private mortgage insurance, hazard insurance, property taxes and homeowner's association dues).

The second number is the maximum percentage of your gross monthly income that can be applied to housing expenses and recurring debt. Recurring debt includes things like car loans, child support and monthly credit card payments.

For example:

With a 28/36 qualifying ratio:

• Gross monthly income of $3,500 x .28 = $980 can be applied to housing
• Gross monthly income of $3,500 x .36 = $1,260 can be applied to recurring debt plus housing expenses

With a 29/41 qualifying ratio:

• Gross monthly income of $3,500 x .29 = $1,015 can be applied to housing
• Gross monthly income of $3,500 x .41 = $1,435 can be applied to recurring debt plus housing expenses

Simply guidelines

Remember these are just guidelines. We’d be happy to pre-qualify you to determine how large a mortgage loan you can afford. We look forward to helping you buy your dream home.

Rules of Thumb

• Debt to income Maximum is 60% on an in park purchase & 55% on land/home purchases.
• Refinance debt to income maximum, both in park and land/home, is 55%
• Unless you own your own business, the manufactured housing industry does not have a stated income program.
• If your home is on land, MobileHomeLoan.biz can use bank statement deposits as income for full documentation. If your deposits are into a business account, we count 75% of the deposits as your income.
• Up coming raises can be counted within 90 days of raise date. A letter from your employer is required.
• Alimony, child support, structured settlements, ssi, disability, ect., can all be used to improve your debt to income ratios. Proof that the monies will be received for atleast three years is required.
• Large transactions on your credit report that were cosigned loans can be negated with a minimum 6 months cancelled checks from the party making the payments.
• Business owners can use line items like depreciation as income.
• Rental income must be for one year before it can be counted.

As with any other guidelines Loanjunction.com has, there are always exceptions to the rules. Strong credit scores, strong mortgage rating and equity within your home are all factors in changing the rules of thumb.

Loan Questions And Answers

 Mobile Home Loans Q & A  

• What is the Fico range for good, fair & bad credit rating with manufactured lending?
  Good credit is usually defined as the borrowers with few if any past or present collections, good income & credit over 680 fico. Fair credit borrowers would have more deragatories, lower income & credit from 600 fico to 679. Generally bad credit is those clients with a previous bankruptcy or significant ongoing collections and/or leins, significant debt, lawsuits amd/or past or present ongoing foreclosure and a credit score of 599 and below. (in some cases credit score is not the only determining factor for a fair credit loan. We will always try to qualify you fair credit first)
• What is debt to income ratio?
  Debt to income ratio is the calculation used by us to determine how large of a loan balance your income can support. Typically this calculation is figured by adding all your bill's minimum payments due each month, your space rent & new mortgage payment divide by your gross income.
• What is the lowest down payment I can put down: for good credit 5% down on land home & in park. In some case we allow for 100% financing when getting the home at a significant valuation.
• What loan term will be best for me?
  This depends on your goals. If your goal is to pay off the home quicker then a shorter term is suggested. If your goal is lowest payment then a longer term is best.
• What will my closing costs be?
  Good credit borrowers never pay points & the closing cost for these borrowers is usually $1300 to $1800. Bad credit borrowers will usually have to pay points. Typically, our closing cost ranges from $2700 to $4800 depending on the loan size. (In some cases bad credit borrowers may require more closing cost depending on overwhelming negative factors)We do have no closing cost programs.
• Can I consolidate bills? Yes. In some cases we actually may have to pay bills to get your debt versus income inline.
• Can the seller assist with down payment?
  Not on good credit loans. In CA, OR & WA we have a program where the seller can assist with securing part of the risk in a bad credit mobile home purchase loan... they may also assist with closing cost, repairs, fire insurance and home warranty. We do allow gift for down payment. 
• What items must be prepaid?
  There are no pre-pay items. Typically we allow you to finance into your new bad credit purchase loan up to 2 year of fire insurace, 2 years of a home warranty program, closing cost and up to 6 months of space rent.
• How long is quoted interest rates good for?
  Called a rate lock, under normal instances we lock the rate for 60 days which is free to the client. 
• How long will the approval take?
  With a complete file and motivated client approvals take 30 minutes with loan closings in as quick as 3 days for bad credit & 7 days for good credit.
• Will the loan have a prepayment penalty?
  Absolutely not. Even with a bad credit standing we won't be assigning a pre-pay penalty. 

• Experience.
  Founded in 1999, LoanJunction.com has processed and funded 10's of thousands of mobile home loans.
• Customer Service.
  We are only as good as our last clients says we are. That's why with every customer we'll move mountains for the privilege to be your lender. With caring staff, 24 hour customer service & online account management we intend to move mountains for you for years to come.
• Financial Resources.
  LoanJunction.com is a national lender drawing upon over 4 billion in investment capital for our clients needs. 
• Track Record.
  You don't get to be a proud AAA rated Better Business Bureau company by doing things the wrong way. We intend to keep it that way.
• Community Support.
  We have a larger responsibility to support our clients long after the transaction is done. Please visit our Park Crime Prevention Page to join us in keeping our park communities safe and crime free; Also As rent control advocates, no one is more out spoken about keeping our parks free of exuberant & predatory rent increases.
• Technology.
  With an eye on the 22nd century, our client management services are second to none. Our award winning online operations coupled with 24 live customer service, automated bill pay and rate decrease notifications we stand at the forefront of mobile home lendings' long awaited technological revolution.
• Hands On.
  There are no substitutions for rolling up the sleeves to get the job done right. That's why each client is assigned a proven & considerate account executive to oversee the loan transaction from start to finish. This is your guy or gal in the trenches with their "hands on" approach.
• Accountability.
  Each staff member is 100% accountable to you and your needs. Whether the loan has unforeseen difficulties, or tough measures need to be taken, our staff from the president on down will always field your calls and/or concerns.

Last Updated:  Thursday, January 03, 2008 

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