Interest rate

[Patrick]

Hi, I'm very close to closing on my new mobile home. However, I'm rethinking going through with the deal because of the Interest Rate. I have a repossession on my credit that will be deleted in a year. Because of this; the lender approved me for a loan with an 7.400 ARM or an 8.600 fixed rate. When I told the Broker that was too high, He tried to talk me into the deal by telling me I would be able to refinance when that year is up. I have two questions.


1) Is it smart going into a deal with plans to refinance?

2) How difficult is the refinancing process, and is it a costly process?



thanx

[jgn]

Refiniancing is not a completed transaction but is not certain either. You have to go through the same process as the original finance, credit check, appraisal, employment verification. If any of these are not acceptable than they will not refinance the loan and you are not assured the interest rate will be any better but if you go with the fixed rate to begin with you at least know what your rate will be and can opt to not refinance. There are all of the fees associated with the original finance, closing costs, filling fees, appraisal cost etc. . It depends on how long you plan to ramain in the house and what the interest rate savings will be to determine if a refinance is the right thing to do. If you plan on staying in the home longer than it takes to make up the difference in interest savings than the costs are, it is a good move. Any interest is tax deductable, providing it is real estate not chattel, so you save the percent of interest your tax rate is.

[Patrick]

thanks, jgn

I do plan to stay in the home for quite some time. I did'nt realize there was so much involved in financing and refinancing.

[rmurray]

Interest on manufactured home chattel (home only) financed homes IS deductable..As well as interest on campers..motorhomes and house boats..

[rmurray]

Oat...if your repossession is 6 years old...was there a large deficiency balance..If not you should easily be able to get a better rate..Even if you have to negotiate with the lender to pay it off..then for sure you will get a better rate..about 6% fixed..

Refi's can be costly and hard to do...ARMS can get very expensive..be sure if you accept an ARM..you clearly understand what future payments can be..Many ARMS have caps...but not all..

Refi costs could easily be $5000...probably far more than it would take to pay off the car..

Good Luck

[Ellen]

I agree with rmurray. We just got a home/land loan at 6.625% fixed 30 with lender paid mortgage insurance (that way it's deductible). Of course, my FICO score is 771. I heard from a broker you never want to "lock" on a Friday and that last week most mortgages were at 6% fixed. You may want to check out another lender.

[Lois]

Can anybody recommend a lender that they've used? I'm looking to buy in Florida and am having a terrible time finding a lender. The ones I've contacted are asking about 12% and I got their names from the Manufactured Housing Association website. I'm a first time buyer and all this is Greek to me!! Thanks for your help!!

[Pat]

Try Wells Fargo. They were wonderful to us.

[rmurray]

There are 2 different kinds of finance for manufactured homes...

Home only...the only finance you can use in a park...and can be used on private property that you own or that you lease...This type of finance is more costly than traditional home mortgages..rates are vary by lender...by your credit score..and the size of your downpayment...There are even lenders who will only finance in the nicest parks..at discounted rates..example is SouthTrust Bank..

Usually the rate vary..from those with the best credit..and large 20% down payments at about 7.0%...To used home finance for those with average credit and small down payments at 13%...

Then there is mortgage finance..where a manufactured home is financed just like a site built home with a mortgage...rates again are credit sensitive..but are about 6.5% +/- 1/2%...These mortgages can be had from traditional mortgage companies like Wells Fargo mentioned here in another post..If you want to try them..call the Spring Hill, Florida office and ask for Lynn..She is an originator who specializes in manufactured homes...352-683-3178..

Also input your info into the "get a loan section" of this web site...Good Luck

[Lois]

Thank you - I will do that!