my fiance and i looked at a mobile home yesterday to possibly buy, but it's going to take awhile for us to get a mortgage, because we've got some credit problems we have to take care of first. the mobile home owner (who's family is friends with my fiance's family) said he'd consider letting us rent to own until we can get our own mortgage. (he's in a hurry to sell so he can move up north where his wife and kids are). he wants to sell it just for the ammount he owes for it. is there anything we should know before we go through with this?
2006-10-19 09:05:18 · 8 answers · asked by LoriBeth 6 in Business & Finance ➔ Renting & Real Estate
the actual worth of the mobile home and the land it's on is WAY more than what he's selling it for.
2006-10-19 09:06:06 · update #1
You need to work on your credit problems while you are renting the place. Once the term is up (usually a year or two) then they will apply the rent you paid towards a down payment. If that isn't much, and your credit is still bad, then you won't get approved for a loan and will loose out on all the money that was put in. I would go to a free credit counseling agency to find out how to improve your credit so that you can ensure that you will be able to get a loan when the time comes.
2006-10-19 09:09:42 · answer #1 · answered by Amanda SSS 3 · 0⤊ 0⤋
First of all, how do you know how much the home and property are worth? Have you gotten an appraisal? that is the FIRST thing you must do before signing anything. A mobile home is nothing more than a trailer. It does Not increase in value it decreases. The land (if any) will probably increase a bit (unless it's just a lot in a trailer park). You need a title search and a survey of the property to make sure there are no liens and to find out the exact dimensions of the property. All these things cost money. You should ask him to get these things and maybe add a bit to the rent to cover the costs. If he's in such a hurry he will probably do it. Be very careful...if he is selling for what he owes, he probably owes more than it's worth.
2006-10-19 16:21:41 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Well, you've got some priority problems LoriBeth. First, there are 3 things you should never do:
1) Never buy a mobile home cause they go down in value. Rent it maybe. If the land is overwhelmingly undervalued, then it might be okay, but you shouldn't be buying land if you have credit problems anyway.
2) Never buy anything with just a roommate because roommates take off and don't pay their share and you get stuck.
3) Never buy anything rent to own.
Here's my suggestion: Both of you need to read Dave Ramsey's book The Total Money Makeover. It's great on how to get out of debt and how to manage your money. www.daveramsey.com
Good Luck
2006-10-19 16:13:56 · answer #3 · answered by snvffy 7 · 0⤊ 0⤋
What you could do is ask him if he would be willing to set up a legally binding contractual agreement to accept payments from you for a certain period of time (ex.15yrs) at the end of which you assume ownership. by doing this he would essentially be financing like a bank for you. This would only work if he is the 100% owner of the home and property though. If he does choose to allow for this be certain the contract is viewed by a attorney. If not you can always try speaking with a mortgage broker. A mortgage broker unlike a bank can offer alot more types of loan programs that a typical bank can not regardless of poor credit. Good Luck
2006-10-19 16:18:38 · answer #4 · answered by stevecook12 1 · 0⤊ 0⤋
One important thing you must know; When you rent to own, its not like renting an apartment. When something goes wrong (Plumbing, appliances, electric, doors, windows, whatever) you must use out of pocket money to make those repairs or replacements.
Which is reasonable when renting to own. Anyone buying a house has to do these things. I've heard to many people cry babying about this and acting like its the land-lord's responsibility and its not.
INSURANCE is a MUST! They will have insurance to cover their losses - but you need to have at least, "Renter's Insurance" to cover any losses in case of fire or storm or theft of property (furniture, appliances, etc)...
2006-10-19 16:20:01 · answer #5 · answered by Victor ious 6 · 0⤊ 0⤋
It does sound like a good deal. However, I would check the property situation, liens (Taxes, Bank) are on the property before buying it. If there are liens on the property that you don't know about then you may end up renting for a while when you could have used that time to buy another property w/o any such complications.
2006-10-19 16:11:26 · answer #6 · answered by Curious 2 · 0⤊ 0⤋
Be very, very, VERY sure you get that in writing and determine up front who is responsible for any maintenance while you are "renting to own".
If he's really that interested in selling, he could just finance a loan for you. That's basically what he's doing, but officially financing it for you will be cleaner.
2006-10-19 17:41:45 · answer #7 · answered by Phoenix, Wise Guru 7 · 0⤊ 0⤋
get everything on paper, payment plan, how many months, and get it notarized just remember the first to try to mess you over is your friends and family
2006-10-19 16:59:53 · answer #8 · answered by money maker 3 · 0⤊ 0⤋