Down-payment on a new MH

[Peter]

I have some questions on the down-payment part of purchasing a new manufactured home. My wife and I are recently married, and are looking forward to buying our first home. We have found the home we want at a local dealer, but the lender they use is kinda unwilling to do what we want. Now my brother in law on the other hand used a different dealer and lender, and they were able to work out a down-payment deal. Here's our problem: The house we want is roughly 58,000 from our dealer, a special deal for us since i did his website and have known him awhile. We want to put 10% down, and we will definitely have that before the house is delivered, but we only have 5% right now. Is it possible to put down 5% down, then put down an additional 5% when the house comes, so we will have 10% down total, and get the lower monthly payments we want? If anyone can help, we're looking to buy very soon. Also, when do you close on a mh, when you order or when the house is set up?

[rmurray]

Depends on a few things.....

Yes..it is common to pay a deposit now and the balance of the down at or near closing...not after the closing....

Down payment "deals" made without full disclosure to the lender are credit fraud and can cause great problems in the future...

If you are doing home only finance..the down payment must be sourced and seasoned...Meaning..the lender wants to know where the down is coming from and when..If it has not been in your bank account for 60 days..they want to have proof of where it came from....seldom will they accept gifts..If they do accept a gift....the giver will have to prove they had the money and copies of the canceled check to you might be asked for.....Land/home lenders commonly do the same..In both cases the money must be paid by closing..

In the past....downpayments were an area where dealers and consumers had often lied to the lender...ultimately causing lenders to have much larger losses than originally anticipated...In the last year or so...all lenders have tightened up the down payment rules to be sure all is legitimate..

Closing is done on home only homes just prior to the delivery after the home has come in from the factory..The paperwork requires a serial number and cannot be done until the home is built...Land/home finance might involve a construction loan that would be closed just prior to delivery...Permanent long term finance will only be closed after the home is delivered and set...ready to live in..

It sound like you are talking about a home only purchase...you should reconsider that especially if you are planning on putting this home on rented land...You would be far better off to finance the land with the home...interest rates are much lower and resale is much better...

[Charlotte Maness]

Mr. Murray, what you say about downpayment funds being sourced and seasoned, does that apply in all states?

Thank you again for your knowledge and willingness to share that knowledge and experience.

[rmurray]

There are very few national home only lenders left in the business..All have this requirement..some do require more documentation than others...

[Charlotte Maness]

That was/is something I was unaware of and would run into a road block in my time frame had I not been aware of that reqirement.

If I stick to this forum, I will eventually learn something. Thanks again.

[D.Abben]

If you are in Michigan there are local banks that will possibly do zero down but be prepared for a higher rate and short term.(180 months max). There are others but the terms are even shorter to include balloon notes. Some lenders will allow for community rebates if disclosed at time of application(you must have 5% of own money "sweat equity"). Again you will pay a higher rate. DP fraud is probably the biggest problem in MH lending and lenders are wise, please do not let your dealer talk you into anything that could potentially leave you homeless later. The dealer if caught would have to repurchase your loan from the dealer leaving you w/o a loan. My suggestion is to put at least 10% down on a 240 mo term or less. Homes in parks depreciate unless in a highly desireable area, establishing your own equity is imperative. Pay that loan off as quick as you can. (Simple Interest/No prepayment penalties)