All Forum Posts by: Bill Hamilton

Well, I wouldn't not (I know....double negative but) rent to someone because of a Chap 13. But I would want to know more about the details. If what they say pans out, then it might well have been a lack of knowledge about the tax penalties on a withdrawal. That does not automatically make them a bad risk.

Buy the property, split the buildings/land into separate lots and survey them. Sell off one of them or refinance them individually.

It's been a lot of years since I dealt with one of these and the laws could have changed. But I do remember having the house on one acre surveyed out from the rest of the property, then just doing the refi on that. This leaves the rest of the acreage unencumbered and therefore allows for the Ag exemption to remain. You would think that losing that much of the land in what the lender is lending on would kill the deal but you would be shocked how little value the extra, unimproved land adds to the price sometimes. Be aware that in some areas, getting the one acre broken out and then surveyed can be an pain in the rear, time consuming and sometimes expensive. But it may be your only option. Most banks won't refi below $50k and in some cases not below $100k. Try a local bank. A lot of the nationwide ones don't really understand Texas Cashout Rules. They might tell you they can do it and then the whole thing falls apart when the title company looks at it.

Based on the numbers, I would say the seller has no equity to owner finance with.  Even if the bank would allow it, which usually they don't. But as @Kevin Phu said, more importantly, what is the ARV? And I guess, given the forum we are on, we are assuming you are buying this as an investment or flip rather than as your primary residence. All those things change the formula considerably so you may want to provide all the details for better answers.

Before you start looking for a house or condo, contact a bank or mortgage broker. Depending on whether your job is commission only or if you have a base salary, you will have different ways of calculating your income, which can severely affect your DTI and therefore the price you will be qualified for. If commission only, you might not even qualify at all until you have been working that job for two years. If there is a base pay, you might only be able to use the base pay to qualify. Not that I am trying to burst your bubble but you really need to have a professional look at that income before you start making offers. I would personally recommend @Chris Mason as an extremely competent mortgage broker in your state. He is a moderator on this board and really knows his programs.

If you are looking for conforming rates, that's probably not going to happen. Unless you can make the deal work with just using the original purchase price.  You can look at portfolio lenders but in general, the rate is going to be a couple of percent higher.

In my experience (limited currently as I haven't been in the lending game for many years) there are no "good" loans for these. When you don't own the land, you are buying something that only depreciates over time. If 21st Mortgage (which used to be one of the largest mobile home lenders in the country) is willing to finance this with only 5% down, you should probably take it and run. You might try calling your closest Champion (or other) mobile home dealer and see who they use to finance their sales. They might be able to point you to a better finance deal. But frankly, on leased land I rather doubt it. I am going to page @Chris Mason to see if he has any insights into this that I lack. 

@Cody L. I must have been more tired than I thought last night. For some reason, my mind said U.S. Virgin Islands. That is clearly not what you actually said.

The answer may depend on whether this is commercial or residential and whether it is owner occ or investment property. I have seen clauses like this before but only on a commercial deal. Sometimes lenders don't want any other entity to have an interest in the property because the second or third lien holder can still initiate foreclosure proceedings. And that could create a more complex and expensive situation if the owner has financial difficulties. 

@Cody L. that was probably because you were still in the U.S. Just because it's a U.S. territory doesn't mean that they aren't U.S. citizens and that someone with a notary license there, wouldn't be licensed in a similar way to someone in Texas, and that their notary seal would be less valued or recognized. It's a whole different thing when you are in a foreign country where the licensing and procedures may be entirely different. @Walt Middleton if I were you, I would call Black, Mann & Graham

https://www.bmandg.com/

 They are a Texas law firm that specializes in mortgage docs etc. and we used to use them when closing deals in Texas. Texas has some odd rules but these guys will probably know the answer off the top of their heads.