is land contract bad?
May 26th, 2009 | 
Author: 
What do you know about land contract? I am thinking of buying a cheap (yes, that’s the best word, not “afforable” or bargain priced…LOL) mobile home. What do I care if it falls apart in 30 yrs? I will be old then. Maybe in a nursing home or retirement community. Sure, people like to will/gift an old house to thier children, but… by the time I am 60, I would hope that my 30 yr old kid has already bought her own home. She will not need the sale of my house to benefit her. Times change. people live longer now… wait… does that mean I should buy a stick built/block house? Please? someone help me! advice, please! I’m very lost. I’ll do whatever you tell me to do. I’m young. I don’t know the first thing about buying a house. It is suggested that I get FHA approval for my loan. But I have $15,000 for a down payment… or more ($8,000+).. (but I wanted to go shopping for new beds, matteresses, maybe even a used car, any appliances, stoves, washer dryer, dishwasher, needed)…
Thank you!!! Fascinating! excellent help everybody! wow! Yeah, I suppose an “older” mobile home would be much much “older” in 20 yrs, huh? what will I do? I’m not sure. But it is on , gasp, State land! The location is to DIE for. Surely, someone will want this property , purely based on the location, it has re Sale value! Awesome Idea though. WHERE will I live? if my mobile home falls apart?????? That’s a good question. Maybe I can save my usual “house payment” amount towards a new mobile home? Because this one will be paid off in 2-3 yrs if I use land contract? then, I can continue to place the normal “house payment” amount into a special savings fund? for next future mobile home??? maybe??? we all know how some people can not keep a strict savings. but this is really important!!!!! Besides, all that “extra” money would be pure profit. It should go into savings. How many beds and tvs can one person buy????? LOL
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Category: Retirement Gifts | 
Tags: Dishwasher, Nursing Home, Shopping, Stoves, Washer Dryer | 
3 Comments »
birthday present
First, please don’t do whatever I (or anyone else here) tell you, at least without getting professional advice.
A few quick observations:
First, contact a Realtor and a good mortgage broker. A mortgage broker can tell you what you can qualify for, as far as a mortgage goes. You really need to know that. Then a Realtor can tell you what type of house you could buy with that mortgage.
Second, regardless of what the Realtor and mortgage broker say, you have to be comfortable with the figures. A few years ago, people were getting approved for homes they couldn’t afford. And they should have known they couldn’t afford them. So, just because you qualify doesn’t mean you should buy something. Buy what you’re (financially and physically) comfortable with.
Third, land contracts are OK, but risky for you. In a land contract, the seller is promising that if you make your payments, after a defined period of time he’ll give you title to the land and improvements (house, or mobile home). The risk, especially today, is that the owner may lose the land. Or he may not be able to transfer the land to you. Or even, if the land contract isn’t done right, that he might sell the land to someone else. Or that you might pay for 5 years or so, then miss a payment, and void the land contract. Many people have come out fine with land contracts. But a lawyer can structure something that protects you better.
Given a choice between buying a stick built home and buying a mobile home, I’d try for the stick built home. You’ll find that it’s difficult getting mortgages that cover mobile homes. They’re generally not considered real estate. Rather, they’re viewed as personal property, like cars or trucks. Also, while you make a valid point about not being too concerned about its condition in 30 years, how about 15 years? You buy a 15 year old home now, and in 15 years you’re living in a 30 year old home. The stick built home will probably be holding up better in 15 years than a mobile home.
Still, you have to make the decision for yourself, not for your daughter in 30 years. You’re right about that.
One other point: If you can buy a home FHA, do it. Don’t use all your available cash for a downpayment. You can get FHA loans for 3.5% down. That’s a great deal. Keep as much cash in your own pocket as you can.
So, in brief: Check with a Realtor and a mortgage broker to seek what you can afford, and then what’s out there in your price range. Conserve your cash by going FHA, if you can. Consult with a lawyer, especially if you’re considering a land contract.
Hope that helps.
gifts for him
Land contract is the rent to own of real estate. I hear horror stories of owners dying and deeds not getting done, buyers opting out of deals, taxes foreclosed, insurance unpaid, you name it.
If you are serious, get a good lawyer and a remarkable contract for deed
present idea
You have multiple issues going on here, I will try to pick this apart.
#1 Land contract. There is nothing wrong with buying on land contract as long as it is well written and can be reasonable executed. Make sure you have an attorney that represents your interests review it.
#2 Mobile homes. The reason some people won’t purchase a mobile home is because it is similar to purchasing a new car, it is never worth what you paid for it initially, i.e. it is a bad investment. You will not get an FHA low for a MH in a park.
#3 Your daughter. Your call.
#4 Stick built. Typically a much better return than any MH.
#5 FHA loan. Very popular for a reason. Stick built homes can be purchased for 3.5% down payment.
#6 Very lost. Young people buy houses all the time. There is infinite resources out there to find information. The best course of action I can suggest is talk to a local loan broker (most internet lenders are not good on counseling potential home buyers) and a good Realtor about what steps you should be taking.
#7 $15,000. As a general rule, buying a house comes down to priorities. Do you want new beds, mattresses, appliances and a car or do you want a house? For some people, the choice comes between lifestyle and saving for a house. Priorities.
Good luck in whatever you decide.