Two Questions about Financing

[Kay]

My husband and I plan to buy a Patriot Pinnacle, 1755 square feet, with all the construction features recommended on this website and in Randy Eaton's book..plywood floors, 2x6 ext, 2x4 int, Hardie Board lap siding, 5/12 pitch roof, etc. We're paying 74000 which includes poured footers, Hardie skirting, sales tax and title. We live in Mississippi.

Our credit score is 735. We're self-employed (been in business for 5 years) and our income is sufficient to pay the notes. We have 10% to put down.

I have 2 questions....The dealer seems to think that the fact that our current home is paid for is a liablity. We haven't put this home on the market yet, but intend to sell as soon as we move to the new home. He said that their lender has been burned by people buying homes for family members and then later defaulting.
Can we be turned down because we already own a home?

What is a good interest rate for a 25 year home-only loan with our particulars?

Thanks,
Kay

[Kay]

Forgot to mention that we'll be placing the home on our own land. The land (3 acres) is paid for and we don't want to mortgage it.

Thanks again,
Kay

[rmurray]

Rates will be high...About 9.5% for a home only and 10% down...Mortgage rates will be about 6% in the current market..Let me give you an accurate example...

Home only if the loan is 67000 after the downpayment..(this assumes all costs are included in the 74K figure..even the tax)..

300 months...of....$585.38

OR...mortgage loan...

180 months (SAVE TEN YEARS)..or...589.6.......this includes a reasonable amount of closing costs...Or a full savings of $70,000.......What other possible use can an asset be but to help you save tens of thousands...

Many lenders do have a fear of buy fors...but there are many lenders for your dealer to deal with...your good credit should open a lot of doors...if you decide home only is for you...let him call in your application..there are no fees for this...all they can say is no..

Mortgage lenders will not be as touchy about this issue..They might ask you certify you intend to live in the new home...but that is all they will care..

[Kay]

Thanks, Mr Murray.

I know we'd be better off with a land-home deal, but it's another case of "family" land. Although we do own it, we made a promise to my mother not to mortgage it.

I was feeling a little anxious about finding a lender, but your common sense reply has calmed me down. We're just going to have to bite the bullet on the interest rate and try to pay off the home early!

Thanks again,
Kay

[Terry]

I also sell the Patriot Homes.
Would be glad to talk with you and your husband about your purchase and financing possibilities.
www.homestead2000inc.com