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Utground.com Western Land Realty Share |
Jonathan B. Muir |
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Financing Options
Residential/Cabin.
There are many lenders out there that I have
had the pleasure of working with that offer exceptional mortgages,
One of the problems that we are facing here, mostly due to the
economy, is qualifying the Property. We run into problems with
properties that have cisterns, properties that have pillar
foundations, properties that do not have utilities connected,
modular homes that have been moved from the original setup property
and properties that are not accessible year-round. There are not
"many" if "any" comparable sales of similar properties within the
specified time that can meet the new stipulations set in place by
"Fannie Mae and Freddie Mac", the primary source of funding for most
lenders. Most lenders want comparables of properties sold within a 5
mile radius in the past 6 months. Three years ago we could get a FHA
loan on modular homes that had been moved. There are only a
few lenders that will lend on these, so we have to look for
alternative means to finance these properties. Having said that,
there is always the possibility of
Seller/Owner financing. I will try to help you
determine the option or lender that will work best for you.
Recreational/Vacant Land
At this time it is almost impossible to obtain
any sort of financing from a bank or lending institution on vacant
land. A year or two ago I sold a number of properties with buyers
able to get funding from credit unions. America First and Mountain
America Credit Unions were the two that were used most often.
That has not been very successful in nearly 2 years.
You could do a home equity loan if you own your home with sufficient
equity, You would have to discuss with your mortgage lender.
As with the residential/cabin properties, we can look at the
possibility of
Seller/Owner financing.
Seller/Owner Financing
It has been my experience in the past two
years that sellers do not want to carry contracts on their property.
Of course they would, almost without exception , prefer cash. When I
list these properties for sale I always talk to them about what is
going on in the mortgage industry and the facts about the
inability of lenders to work with this type property. I work very
hard to give them facts that they need to make their decisions.
.Most sellers will not accept less than 20% down because
they usually have to pay 10% realtor fees on vacant land plus title
insurance, which is required by law. They also have a title fee
that also comes out of their proceeds from the sale. Their
only alternative would be to come up with money out of their pocket
to sell the property. Not many sellers will tell us a dollar
amount that they will accept for down payment because they feel like
it would cut them short. They do want the most possible down and the
shortest time on the contract.
Sellers don't usually want to carry the contract for more than
ten years.
Most seller finance contracts are accepted
with an interest rate between 6-10%. Sometimes when a small down
payment is offered it looks better to offer a higher interest
rate. This looks good to the seller on paper because they are
getting more money for there property and it will only make a small
difference on the amount of money they ultimately receive.
All of the terms are negotiable, sales price, seller finance, interest, monthly payment, length of the seller finance. The exacts cannot be determined until we have an accepted offer. Every owner thinks differently. Usually when a seller finances a contract they won't lower the price very much.
There are quite a few "For sale by owners" out there that buy property, even from us, mark it up considerably and offer it for sale with only a few hundred down and a few hundred a month. Keep in mind that they are doing this as a business and usually have large profit margin. They just take the profit over a long period of time. They are providing a much needed service especially when you are not able to obtain a loan for this type purchase.
With these things in mind it is usually best to find a property that is acceptable, tell me how much you can put down, what interest you want to offer and either the maximum amount you want your monthly payments to be or the maximum length of time you want to pay on it and I will help structure an offer with your specifics in mind.
If you feel that you are ready to put an offer on a particular listing, call or email me directly. I am happy to help.
Jonathan B Muir
435-724-7686