To the Mortgage GURUs out there. I have been trying to sell my mobile home (on rented lot) for the past 2 months, and have since moved. Because of the terrible market, I've gotten to the point where I'm willing to "Owner Finance" to get the sale through. What type of credit questions should I ask the prospective buyers? Does anyone have experience with offering property for Owner Financing? Does anyone know of a good place to look for forms to use? I've drawn up an amortization schedule for the 3.5 years of the loan and we plan on using the down payment as a lump sum payment on principal to our mortgage to bring the principal down and allow for more of the principal to be paid Thanks in advance for any advice. ChrisB
There is a loan on the mobile home now, that is why I'm anxious to get it sold pretty much any way I can, can't really afford to keep making rent payments on the house, and mortgage and lot rent on the mobile home. I would hate to start my 7 year clock for reporting negs up again with a forclosure on my MH mortgage, then a judgement for the negative equity, then wage garnishment to pay off the judgement, then eviction from the rental because I don't have the money to pay rent because of wage garnishment.
ok so the consensus seems to be seek qualified council to make sure all the I's are dotted and T's are crossed so that IF the person buying it from me decides to stop paying that I'll be able to easily forclose. That's the type of advice I needed, and the reason I always turn to my CNET community. ChrisB
Before you waste your money on an attorney - look thru your loan documents. MOST of the time there is a Due on Sale Clause that will allow them to accelerate the mortgage if they find out you "sold" the home. Secondly, I believe (and I could be wrong) that Wrap Around Mortgages are illegal in some states - This is VERY basically what you are doing. Now, interesting thought - if this home is on rented land, it is probably considered a secured installment loan, and all the mortgage rules may be thrown out the window. On 2nd thought - go see an attorney.
Heres the deal, First consider this. Don't worry about the credit of the guy buying your home because he will have to get "park approval" anyway. This should be the first thing you do. Second, you shouldn't have a problem selling this on what's referred to as an "installment contract". The park however will need the "buyer" to be on the title since most parks do not allow renters. The lender you have on this home right now may be purvy to everything except this one detail. They will most likely not allow changes to your title as this could put you, the lender, and the buyer at risk. In order to get the buyer on the title...you must refinance with the bank. The problem though is a higher rate most definitely. Any other questions?? SnakeMan
Yeah, actually getting the loan. Owner financing means that you basically can tell the dude with the home anything you want and as long as you come up with the dough, your in like flynn. Only problem is, lets say you put up $2,000 to get in the house, then you make 12 payments of $1,000 now you default and can't pay. He can reclaim the property much easier than a mortgage co. can and your out the home and your $14,000. Good luck! SnakeMan
The land owner does not allow privatly owned trailers to be rented out, but even if they sign with him to be renting the land, wouldn't rent-to-own give less security? I want to be financially done with the trailer. If someone were to rent it for 1-2 years then move, I'd be in a worse spot with an even older trailer worth even less, and more difficult to sell. Also if I were "renting" it out, after a little while the person living there decides to move, I'm stuck without recourse. Besides, the way I see it, if someone can get their hands on a decent singlewide, and know they're only paying on it for 3.5 years, at which point they would own it outright, that would be good motivation to stay. Can you think of another way to have a nice 2 / 2 for $140 a month? ChrisB
Owner Financing is basically selling on a land contract. Or giving a second mortgage. Some things to watch out for are: 1*If The buyer can't afford to pay the bank the monthly mortgage payment then how can he pay you?? 2* If you don't get paid you have to foreclose same as a bank would. 3*On a 2Nd. mortgage the first mortgage holder has first rights in a foreclosure. If the first holder forecloses you the 2nd.are out of luck if the sale of the property only brings enough to pay off the first holder. The first holder has to be paid before you as a 2nd. Holder can foreclose. This means that if you don't get paid you have to pay the first holder off before you can foreclose if you don't get paid. THE END ** *** ** LB 59 """"```--~~~~~~~~~--```'""'''
.1* MOST of the time there is a Due on Sale Clause that will allow them to accelerate the mortgage if they find out you "sold" the home. 2*Secondly, I believe (and I could be wrong) that Wrap Around Mortgages are illegal in some states - 3*This is VERY basically what you are doing. 4*The park however will need the "buyer" to be on the title since most parks do not allow renters =========================== 1*This can be handled by how you write up the agreement with the buyer. 2*First time I've heard this. 3*Since when is owner financing and a wraparound mortgage one and the same? 4*Not if the agreement is a sales contract. The problem with most owner financing is you give up tile and if there is a non payment issue you have to sue the guy to regain title. In a rent to buy deal you keep title till you're paid.
1*The land owner does not allow privatly owned trailers to be rented out, but 2*Even if they sign with him to be renting the land, wouldn't rent-to-own give less security? 3*If someone were to rent it for 1-2 years then move, I'd be in a worse spot with an even older trailer worth even less 4*Also if I were "renting" it out, after a little while the person living there decides to move, I'm stuck without recourse 5*the way I see it, if someone can get their hands on a decent singlewide, and know they're only paying on it for 3.5 years, at which point they would own it outright, that would be good motivation to stay. ChrisB ------------------------ 1*But you are selling it. 2*When selling you give up the title before you get paid - the other way you keep tittle till paid. 3*Depends on how you wrote up the sales contract. 4*See 3 5*So would a good sales contract.
I wouldn't recommend owner financing. Back in 1996, when I needed to sell my mobile home, I called several companies that I knew that financed mobile homes. I finally found a reasonable loan officer and he mailed me loan packets. Once I found a buyer they ran all the credit checks, closed the deal, paid off my old mortgage and mailed me a check for the difference. It was one of the few smooth financial transactions I've made in my life. The company was GreenTree. They were since bought out by Conseco and don't do these loans anymore. I'm not sure they're even in business. Just a little time and a few phone calls should find someone who can help you though. Also, will your current mortgage company allow an assumption? This might be another possibility.
FYI - Conseco went BK, and is now Green Tree again. Conseco got burnt by Mobile home loans My next question - is the loan even considered a mortgage? Or is it a simple secured installment loan?
