Why are rates higher?

[juliem]

My family and I are moving from a stick built house in town and trying to get a manufactured home in the country. We have perfect credit and have been told not to accept aprs that are more than the going rate for outstanding credit. We have had it with finance people!

We have had it with the games the banks and finance people play. We bought our land a year ago and have been scammed and messed around with so much, we have put off most of our plans. It began with one dealer who put us with an out of state broker. He botched at least two deals (that we knew of and couldn't get his act together). The dealer sent us directly to a local bank who would finance us but the dealer would no longer do business because it was FHA and refused to accept the financing. We visited some competitors and realized we was against the FHA financing because he was not building the foundation under FHA standards. We dumped them and since have been doing quite a bit of shopping around, trying to decide what we really want, how much we are willing to pay, and what home is the best quality.

We have done some preliminary credit check with 2 dealers since then. The last dealer said we could get in the 5.8%-6% no problem with our credit score, then wouldn't budge from 7%+. When we said no, they pretty much slammed the door and offered no other alternative but the company financing (which I refuse to do based on complaints I've read about this particular manufacturer's mortgage company). Will I encounter this over and over? Any suggestions? Should we try to get financing from a local bank? Fannie Mae?

I feel that banks discriminate against manufactured housing. I do not want to pay twice as much for a stick built house on my land that is half the size and not nearly as well built. I also have been told that since there are no federal or state regulations on how banks underwrite loans for manufactured/modular housing it varies from state to state and from bank to bank...Still, I need some suggestions!

Thanks!

[rmurray]

Boy you are a lucky soul...That experience with the dealer refusing FHA is good for you...maybe he refused because he is resticted from FHA....If he is not comfortable with FHA.He is out of business soon..Be glad you have not gotten caught up in his demise...Your problem is that rates have been rising in the last month and it is expected they will continue up in the near future...Even the best conventional rates now are in the 6.75% range....These loans require 20% down and excelent credit ( above 640 midscores)....FHA will incur larger cost for the home because of the foundation requirements and the engineer fees additional surveys and tests...plus the 1 1/2% FHA funding fee..

No dealer in his right mind will do a mortgage loan now with out a construction loan (sometimes called a bridge loan)....From your stand point you should be looking for a 1 time close combination constuction and permenent loan...A rate commitment today mens nothing when you would go to a final close 2 to 4 months from now..usually your permanent rate will be what ever the rates are then...A 1 time close loan locks the maximum rate for the permanent loan at the rate now...These mortages are quoting over 6.75% as I type this with 1% origination fee..and a 1 time float down option (which means if the rates are lower once the home is built the permanent loan's rate will be lowered to market rate then)

For more info on mortages than you would ever want to learn check out..

http://www.mtgprofessor.com/

Good Luck...

I think you have to under stand that the rates are nearly 7% NOW...My point is if you are going to buy or build you should find a mortgage and home NOW before rates and prices rise even higher...

[Juliem]

Murray,

Thank you for your assistance. A few weeks ago rates did jump quite a bit. We ended up going back to the dealer who did some preliminary numbers for us. It ends up that rates really are climbing and right now, people with "A" credit are getting mortgages are going for about 6.5% for site built homes and I have read that manufactured home housing (if not putting money down) will generally be higher. We ended up on a zero down program at 8% with a buy down of $7,000 in order to get the zero down at 7%. This is also for a 20 year note, which should also be for a bit lower (I thought) Is this a wise choice or are we getting ourselves into a mess? On a brighter note, we are not having to pay closing costs, mortgage broker fees, underwriting fees, etc and they did drop the house price. Is this a typical mortgage note that one might see this month with the interest rate hike?

We had to do this quickly due to the fact that we sold our house and needed to go to close within 3 weeks (our land is on our current home as a 2nd mortgage). Are we getting taken advantage of? This was the scenario given to us BEFORE we contacted them about being in a pinch, so I would like to think that we got as good a deal as we could.

Thanks for your help, any input or comments would be helpful.

[rmurray]

I assume the sale of the house is going to pay off the property...If this is the case..you can go with a conventional mortgage up to 30 years (15 year term would have a lower rate than 30....20 years would be the same.)...Current rates for great credit for this type of loan are still lower than 7% with out a buy down but with an origination fee of about 1% and normal closing costs...You might do yourself a favor by trying the find a loan section of this web site...MH LOAN FINDER. Peter the webmaster here might well put a link to the loan section here if he is lucky enough to see my post among the over 5000 spam posts he has deleted in the last 2 days.

The buy down might well be a valuable savings for you ..Only if you expect to pay for this home for more than 7 years..1 payment at a time..This loan sounds like a US Bank Mortgage..Which is fine but they too have a 2% origination fee ( no broker fee or underwriter fee) and normal closing costs...At the rate interest is increasing..8% will sound like a low rate in a few months....GO FOR IT SOON

[kirkdavison]

FHA and Va have NO price difference for a manufactured home. Conventional is slightly higher (.875 in fee OR about .25% in rate)

[admin]

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