Lots of questions

[Lisa]

My husband and I have had a layout for a Palm Harbor home in our Favorites for over two years now. We absolutely love it and want to buy it but have no idea where to start. We always see these ads those "Fire Your Landlord" type ads that say you could own a home with payments as low as rent. Is this true? What is the first step? We currently pay 475.00 a month for rent, a two bedroom house. How much of a down payment is reccomended? I know ya'll can't answer specifically exactly the home we want, etc. but if anyone has a general idea that'd be great. Also who do I talk to to find out more? Sorry, if my questions are a little stupid. I just really don't know where to start (or if we're actually ready moneywise to start). Thanks a million, Lisa

[jgn]

You really need to be more specific like how big is the home, how much, what do you have to put down, do you plan to own the land, where are you located . If you have good credit you are looking at around $6.40 per thousand or a $50,000 home would cost $316 per month plus taxes plus insurance. In addition to the home you have the cost of the land (stay away from MH parks) hook-ups, septic or sewer which can run a little or a lot.
You should go to a dealer or several and talk to them or go to a mortgage company and see where you stand. There are dealers, Palm Harbor is one, who have their own finance companies but they will be on the high side interest wise. Find a dealer who is interested in helping you and not just selling you something today. Visit this site and ask a lot of questions even if you think they are dumb because there is a lot of varied experience on this and other sites that you can tap into. Don't believe the ads and do your homework because the more you know the better the decision will be.

[Scott]

The first step is to find the home that you love. Not just the layout but the amenities, dealership, and company as a whole. Those ads that you read are just hooks to try and get you through the door. The dealer will worry about the reality versus the dream once they get you hooked on a certain home. PH is infamous for running those types of ads, but it seems to work for them. The chances of buying a home, land, improvements, closing costs, etc. and staying at or below $475/month are completely impossible so whatever you do, don't give them any "earnest money" unless you have a GFE in front of you that estimates your costs and payment. This is just an estimate, but it is generally going to get you in the right ball park anyway. Generally, if you want to pay less than $700 per month PITI you will want to be financing less than approx. $65,000-$70,000 the way interest rates are right now. This would be with a land/home loan. You could be lower on a chattle loan depending on credit.

[mac]

Let me emphasize: Unless you are in California, Don't buy a home and place it in a park - do a land+home mortgage. That way, your interest rate will be the same as any other home, instead of 11-12% for home-only (much more risk to the lender) and lot rent. If you buy a home and put it in a park, you're NOT firing your landlord, you're getting a new one, and putting yourself at their mercy, to boot.
Good luck! Mac

[Gil Davis]

I'm in California and I wouldn't recommend placing a new home in a park. The site rents are going up on a regular basis and you might not like some of the rules the parks have.

We always recommen a land/home purchase so you will be in sharge of your own destiny.

Lots of luck

[Bill Norcross]

Howdy Lisa & other posters. I would agree that you are better off getting into a land-home deal if you can. Your rate will be close to 6, give or take, for a 30-year fixed (30FRM) and that keeps payments lower.

And Gil mentioned CA rent rates going up. We're financing a home-only deal in a big park in CA right now, and their lot rent is almost $700! But they love their home and the park. CA and FL are anomalous in several ways - appreciation of MH home-only, expensive lot rents, $400-600K MH land-home deals, etc.

But that's what comes when demand exceeds supply, and some great weather. FL has to watch out for hurricanes, but CA has to look out for earthquakes. Verdant river valleys in MS and OH have floods. My home state of TX has twisters and huge hail stones. Here in Seattle we have volcanos AND earthquakes, and maybe a UFO here and there.

On the other hand, getting into a home-only deal may be a good place to start for you if you can't qualify for a land-home deal...especially in CA. If your rent is only $475 for a 2BR house, you're either not in CA or you're a few miles out. If $475 is about 38% of your gross monthly income, then you qualify for a 30FRM on about $80K. Assuming you have 20% down, your looking at about a $100K home. But you can buy a home with less down, and there are downpayment grant programs out there that we brokers and lenders can access.

$65-75K toward an new MH is a really nice 1,800-2,000 square-foot 3BR 2BA home with a fireplace...Right guys? Lot rents in Texas and other states might be under $200.

If your FICO scores are decent (over 600), your debt ratio is OK (under 45%), and you have some cash (or can get some) for a down (at least 5%), and you can handle the payment on a 15-20-year term then you're looking at a home-only rate in the 7-9s, not 11-12s like Mac was predicting - but if you're borderline on all the qualification issues, and buying a older singlewide, Mac's in the ballpark.

Email me or call me at 866.587.2643 and I'd be happy to walk you through the qualification ratios, and the particulars of land-home and home-only deals. Maybe you're ready now, and maybe you need a year or 2 to get ready. Either way, best of luck to ya'll. Bill.