I’ve been renting a mobile home for 4 years and my landlords were very nice, but they passed away last year and the house in now owned by the 4 children.
Every mortgage company I’ve talked to is telling me that the trailer is too old (19 years) and they won’t touch it. I asked about buying the land since the trailer is pretty worthless, but I’m told to do that I need a bigger down payment, but the new landlords do not want to renew the lease, so I won’t have time to save a bigger down payment. I’ve tried to explain to them that by putting the house up for sale, anyone else would run into the same problem. They just want to sell the house.
We love the land we are on, and don’t want to leave, but we will have to if I can’t figure this out.
The only thing I can think of is to make an arrangement with the current owners where you would arrive at a downpayment you can afford, work out an interest rate (you have to make it attractive to them), and make monthly payments say, over five or ten years depending on your income and the price of the place. You have to pay all the taxes and whatnot. Once you own the lot you can build a new place on it.
If you’ve been a loyal tenant over the years and have had no major income problems maybe they’ll go for it.
Of course, don’t even think of doing this without an attorney.
You might look into an “lease option” with the children. Essentially you agree to cover all costs associated with the property, with a portion of the “rent” going into a fund that will eventually cover your down payment for the mortgage.
I see this all the time, where the heirs just want to unload the property quickly and split the cash. It can be difficult too, when you have four different parties in on the deal/decisions.
A couple things you might try…Point out the fact that if they have to put it up for sale, they not only have to pay a sales commission to the broker and salesperson which in most areas is around 6% of the sale. You might also sweeten the deal for them by offering more than their asking price in consideration of the lease option.
You should also offer to make it as easy as possible for them and offer to use a property manager to collect and disburse payments to each owner and the taxes, insurance, etc.
Most heirs just don’t want to be landlords because of the hassle, but if they see that they will get a monthly check in the mail with no effort what so ever, with the understanding that you are working towards eventual purchase, how can they lose?
What have you been paying in monthly rent for the trailer and land lease? What are the taxes on the land? What is the current real world value of the trailer according to the bank or a trailer dealership? What is the real world value of the land?
Once you have these #'s your best bet (assuming your credit is OK) is to make a deal with a private investor to loan you the money and that you will pay him back at a rate above bank interest. A trailer has relatively little residual value at the end of it’s main life span so from an investor’s perspective it will be like making you a car loan.
That pretty much tells you why the banks don’t want to loan money on it. If this is true and you can’t come to some agreement with the owners, just let them try and sell it. No one will be able to get a loan and someone with the money will probably want something better. When they see that they don’t have a “hot” item to sell, you will be in a better bargaining position.
Have you tried those federal loans for first-time homebuyers (I forget what they’re called). I know the downpayment is low. I don’t know if they will work with you on a non-traditional mortgage, but they might.