Totally owned land and closing costs

[Pat]

If property is totally owned with improvements and one wants to use the land as collateral to purchase a mobile home, how does one know how much cash one will need for closing costs? $2,000? $3,000? More? If the land appraises at more than 3 or 5% of the total, does that negate the need for mortgage insurance?
Pat

[Bill Fry]

Closing costs are stated by your lendor regardless of collateral.If your credit is good you can pick your lendor,not the the lendor picking you.
For the most common types of morgtages your total loan must not exceed 80% of the appriased value of the home and property to avoid PMI.

[rmurray]

If your land and improvements are free and clear...The closing costs can be financed with the home (if your credit is ok..total costs should be not much more than 4% of the loan)...You still want to shop the rate and costs...they do differ and these differences can be tens of thousands of dollars over the life of the loan...

If you have owned this property for more than a year (they call this "seasoned" land)...the lender will depend on an appraisal of the whole package...the lot and home..to determine the LTV (loan to value)...To avoid the PMI the total loan will have to be no more than 80% of the total value...
If you recently aquired the land..gift or purchase..the land and improvements will also have to appraise at 20% of the total loan amount to avoid the PMI...That is..the loan will have to be no more than 80% of the total appraisal AND the land and improvements will have to appraise at 20% of the total package...

[Pat]

So would it pay to have an appraisal done before we start house hunting? We sort of have one picked out but it would make a difference in what we pick if we knew how the land would affect it overall. Yes, we have owned it over 2 years (free and clear) and have nearly 4 acres, wire fencing on 3 sides, gorgeous white board fence across the front, hundreds of new small trees and shrubs (that was a gift) and the well and electric are in. All that is lacking is the septic. We have the permit, but just haven't done it yet. It is rural - in south Georgia. Near Lake Seminole. We are so anxious to move onto it but have been doing all we can ourselves and forcing patience so we could pay cash for everything.

[rmurray]

It is not possible to do the appraisal before you chose a home...the appraisal is the home and land as if the home was already there...

From what you say...you should have no problem unless you are in an area where there are no manufactured home comparibles.......You might check with a good appraisor for advice about this...

[Pat]

Thanks, Murray