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shawkid

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Buying a house from an indivual with Poor credit
I am in a unique position. I am trying to buy a mobile home from my brother for only 20k. It is appraised at 45k. I have a credit rating of 530. I recently paid off my car and have another car payment for my wife ( Only $250 a month). Other than that I have no credit cards or other debt. I have a couple of accounts in collections. I have had a steady job for 10 + years and make 2400 a month bring home. Can I get a mortgage for only 20k, or a personal loan for that amount of money?

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Mobile home purchase

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Even if it was a new mobile home, they are garbage.  This one is used.  Today it appraised at 45k.  Next year and for every year after it is going down in value.   I have seen your responses and it sounds like you are going to do it, no matter that every one of us says NO.  Do what you want, it's your life but so far, from what I can tell by how you use your credit, your ideas are not good.  You cannot make the money you do and have debt in collection agencies.  No bank is going to give you money for this POS home.  

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Probably not if so high interest!

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Answer to question: No most likely not, as you have accounts in collections and a car note, which to creditors looks like you have a financial obligation already for a few thousand while juggling irresponsibility with accounts in collections. Are you taking care of these collections? Are the credit or medical?

Personal opinion: If you have no credit cards, bad credit, and other accounts in collections, you should not be looking to take out a mortgage or involve yourself futher in credit until you pay of these collections. Contact these agencies making the collections and see if they will forgive the debt, settle for lesser payment, or setup a payment plan in turn for taking the collection off of your credit. They want you to pay what you owe, and though most seem daunting and mean, they will with you if it means they are recuperating their money without having to get legally involved with you.

Now aside from my opinion, you will be stuck with high interest rates if you do somehow get approved, maybe if your wife cosigns/you apply together?

I worked as a banker and loan specialist at  Wells Fargo and BB&T, and the underwriters will usually say they prefer you to get a personal loan for amounts under $50K unless it is indeed a viable house (specific rules in VA include it not being a mobile home). A personal loan will have a shorter pay by term (usually 4-6years depending on how you want to setup monthly payments). A personal loan will also get you a higher interest rate vs. a 15 year fixed or variable mortgage. For someone with your credit you will most likely need a 15%-20% upfront deposit IF they approve you, be at the 90th percential for interest rates in your area, and will be required to get all kinds of insurance for your mobile home to ensure their investment is protected from you (who is seen in the eyes of a creditor as someone who can jump ship at any moment). As well, you will most likely need to be making 75% more than your monthly mortgage/loan payment to even be considered in your credit situation (which seems the case here).

Good luck and please think about this well before hurting your credit further and having inquiries against it. If you do decide to go loan shopping plan it out. Do your shopping for loans at different banks, etc. within a short time frame and credit unions will count it as 1 hard inquiry as they understand people shop around for these kinds of loans.

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It is very difficult with a 530 score. Even with a high score, many banks are reluctant to give loans for mobile homes. They lose value so fast, it's not worth the investment. You also need to factor in the astronomical expense for lot rent, which is a rip off. You would be better off trying to buy a condo.

Reply by
shawkid

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I should have been more specific. The mobile home is set up permanently on 1.16 of acres which is part of the 20k deal.  The land is appraised at 12k the home is appraised at 45k.

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buying a mobil home

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NO one will give you a loan with a credit score of 530 unless you are willing to pay through the butt in interest charges.   My advice is to pay off the loans that are in collections, pay off your wife's car and then consider buying a home.  IMHO  a mobil home is a crap investment.  It does not gain value, it loses value.  I sold my first house for almost twice as much as I paid for it.  

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doubtful

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If you do find a place that will approve you for a personal loan for that amount, the interest rates will probably be astronomical. A lot of places are hesitant to provide loans for mobile homes since they depreciate about as fast as a car.

Would your brother be willing to do a Contract For Deed for the place? That's what I would try and what I did when the bank told me that the mortgage for our house would be "too small" for them to give out.

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