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Old 02-21-2008, 10:54 PM
 
Location: NC
43 posts, read 162,222 times
Reputation: 25

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I started thinking about it 2 years ago... We cannot buy anything right now, but it's possible in a year or two. We are students...so our income is extremely low... though in about 5-7 years it will be ok. So we will not be able to afford to buy a normal house within 5-7 years. There's no way for us to rent and keep saving money...

Do u think that buying a land (1+ acre) and a small 1 or 2-bedroom mobile home would be a good idea? (not to waste money on rent during those 5-7 years). After we pay it off, we could start saving for a house... to build it on the same land later on.

We consider Hunstville, AL and Charlotte area in NC.

I asked our relatives about this but unfortunately they cannot give any advice. They bought their homes long ago..

I have read forum's postings about mobile homes... buying a mobile house and renting a lot is not recommended, and we do not even consider it.

Is it a good idea or not?

Thank you for any ideas/suggestions!!
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Old 02-21-2008, 11:22 PM
 
Location: Northglenn, Colorado
3,689 posts, read 6,847,042 times
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You might be able to use the land for a house later on, but as for the mobile homes, they are like cars. They do not hold value very well, and they are hard to resell. I would keep renting untill you get a chance to get ahold of something more substantial
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Old 02-21-2008, 11:54 PM
 
Location: The 12th State
22,003 posts, read 39,523,741 times
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Banks are really tough on morgaging property with mobile homes, Good luck.
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Old 02-22-2008, 12:20 AM
 
339 posts, read 918,688 times
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Quote:
Originally Posted by NataliNC View Post
I started thinking about it 2 years ago... We cannot buy anything right now, but it's possible in a year or two. We are students...so our income is extremely low... though in about 5-7 years it will be ok. So we will not be able to afford to buy a normal house within 5-7 years. There's no way for us to rent and keep saving money...
I am bit confused by some of things you have stated. Mostly my confusion would be that if you are students with extremely low income and can't save money while renting, how can you afford a down payment for the land and the mobile home? Then there is also property tax, home maintenance, perhaps mortgage insurance, home owners insurance, etc. on top of the mortgage to consider.

I think the biggest thing you may want to find out about is the "total costs of home ownership." This means that given the situation you outlined above, what are the additional costs you will have besides mortgage. I've mentioned some of those above. I can't emphasize this point enough because you don't want to learn about these things after the fact!

My biggest concern for you based on reading the scenario you laid out is that you might get in over your head.

Quote:
though in about 5-7 years it will be ok. So we will not be able to afford to buy a normal house within 5-7 years.
If your income gets better in 5-7 years due to entering the workforce full time, it still seems a little unlikely that you can get a real house right away because most people have to save for quite a few years to build up a sizable down payment. You may not be able to afford to buy a house within even 10-12 years.

Quote:
Do u think that buying a land (1+ acre) and a small 1 or 2-bedroom mobile home would be a good idea? (not to waste money on rent during those 5-7 years).
You mention not wanting to waste money during those 5-7 years, but mobile homes do not hold their value so the financial investment you will make in it will not yield a better return... so in other words, you are still sort of wasting your money. I would tend to think you will not lose money on the land though. The question is - will the land value appreciate enough to offset the depreciation in the mobile home?

Also, will the mobile home be on the land already or two separate purchases. If you purchase land first and then have a mobile put on the land, you may have to figure in A LOT of extra costs such as those for running utility lines to the home, plumbing, water meter, carport slab and awning if you want them, etc. Many of these costs are simply folded into the overall loan, however, they can significantly increase the amount of the loan you will need to secure.

Quote:
After we pay it off, we could start saving for a house
Assuming you have a down payment and can get a loan, how long of a loan are you looking at? Many people get 30-year loans. Even if you were to pay it off early, how early? What if it takes you 10-15 years to pay it off? And THEN you want to start saving for a house? Down payments for houses typically take a while to build. Does this fit the time line you really want to be on for getting a real house? You need to spend some time considering this question.

Quote:
I have read forum's postings about mobile homes... buying a mobile house and renting a lot is not recommended
OK, here is the thing. That is said an awful lot, but the part about renting is not necessarily true. It depends heavily on your situation and then the other factor is the state of the real estate market in your area. I could easily outline a couple of situations where renting is far better than buying - especially in the current real estate market.

I would suggest that you continue renting, get out of school and into a secure full-time job, then begin saving for your down payment, then look at purchasing something.

Last edited by jaindow; 02-22-2008 at 12:30 AM..
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Old 02-22-2008, 01:49 AM
 
Location: NC
43 posts, read 162,222 times
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I have a Master's degree and I am out of school already (just finished it). But due to different resons it will take me about 2 years to get a job with a steady income (as soon as i become a licensed teacher, I can earn minumum $30.000). I can work 2 jobs if I have to. My husband just started his bachelor's degree.

I also read about used mobile homes for like $10.000-20.000. We do not need anything big, we do not have children yet, 1-bedroom would be more than enough for us. If it depriciates in value, we can always keep it on our property for like a shed. i do not care if it is a really tiny house...a living room plus a small bedroom would be enough for us for the next 5 years.

He is an ex-military, so we are eligible for VA benefits, I am not sure if it will help in this case, but it might.... Moreover, we can definietely make a downpayment of $15.000, and maybe even $20.000-25.000. We are good at saving, but it's hard to save when we are spending so much on rent...We would take a loan for a maximum of 5 years. So we could start saving for a house in maximum 5 years...

We would build a house on the same land. well, the only thing i am worried about is that we might not be able to buy a big enough land.... But i saw ads were there was a tiny "bad-looking" house with 1+ acre of land, and it was not for more that $30.000-40.000...or maybe it would be better to buy a small piece of land+a a small house, we would pay it off in 5 years tops.... and then we could save for a normal brick house or whatever.

Is it still a stupid idea? i just hate renting, especially that we do not rent a great apartement... and we still have to pay $600-700 for it....plus every year for 1-2 months we have to travel outside the US...and we have to keep paying for rent... that fact makes me "pissed". I would really prefer to pay for my own tiny house than for an apartment (450 sq. ft)..

in 5-7 years our income should be about $70.000-80.000. I am entering forkforce full time right now...

Last edited by NataliNC; 02-22-2008 at 02:15 AM..
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Old 02-22-2008, 07:54 AM
 
339 posts, read 918,688 times
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OK, your situation is a lot better than I was originally thinking.

Quote:
Originally Posted by NataliNC View Post
He is an ex-military, so we are eligible for VA benefits, I am not sure if it will help in this case, but it might....
I don't know enough about the VA benefits to know if it will help in this case, but I think it should.

Quote:
Moreover, we can definietely make a downpayment of $15.000, and maybe even $20.000-25.000. We are good at saving, but it's hard to save when we are spending so much on rent...We would take a loan for a maximum of 5 years. So we could start saving for a house in maximum 5 years...
Given that you do already have a decent down payment relative to the cost of the properties that you mentioned and you are are looking a 5 year loan, it may not be a bad idea. You definitely want a secure income though or back up plan should you lose a job.

Quote:
We would build a house on the same land. well, the only thing i am worried about is that we might not be able to buy a big enough land.... But i saw ads were there was a tiny "bad-looking" house with 1+ acre of land, and it was not for more that $30.000-40.000...or maybe it would be better to buy a small piece of land+a a small house, we would pay it off in 5 years tops.... and then we could save for a normal brick house or whatever.
One obstacle that you may face was mentioned by one of the other posters - that banks don't really like to secure loans for mobile homes. So this means you may not get the best loan terms if going this route. You might be able to secure a loan with better conditions if purchasing land with a small home instead.

I suggest you talk to a bank and ask them about the two scenarios and see how that affects the type and/or conditions of the loan you can get. That might help you make a decision about which way to go.


Quote:
Is it still a stupid idea? i just hate renting, especially that we do not rent a great apartement... and we still have to pay $600-700 for it....plus every year for 1-2 months we have to travel outside the US...and we have to keep paying for rent... that fact makes me "pissed". I would really prefer to pay for my own tiny house than for an apartment (450 sq. ft)
I didn't think it was a stupid idea before - I just wasn't sure if it was a very well-thought out idea that factored in many other things that maybe needed to be factored in. I still don't think it's a stupid idea now, and it's more clear now that some of those other factors have been considered.

A couple of conditions that indicate buying does outweigh renting would be when your monthly costs of total home ownership (and I mentioned some of the things this includes in my previous post) is less than the monthly cost of renting and when you will be stationary for quite a while. In your case, it sounds like the latter is true. The former will depend on how realistically you can budget and plan.


Based on reading more about your current situation, I don't think it is necessarily a bad idea to try to get something that is a starter place. Even if you don't end up with something that is on a big enough piece of land to later build a home, you might be able to sell what you have and upgrade to something bigger.

I hope this information helps even though it is not a definite yes or no to your situation. If anything, I hope it gives you some ideas to think about or things you can do to help you make a more informed decision.
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Old 02-22-2008, 10:52 AM
 
Location: NC
43 posts, read 162,222 times
Reputation: 25
Jaindow, thank you a lot!!! You gave me some good ideas to think about...

I might consider buying a land with a small house instead of a mobile home. I think it's a good idea.

I do not plan on buying in the nearest year... so i will have more time to save for a bigger downpayment ). I just wanted to know if what i was thinking about was not stupid...after all, we could probably make a monthly payment for a house..about $1000 vs. $700 for rent.

Thank you!!
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Old 02-22-2008, 11:15 AM
 
339 posts, read 918,688 times
Reputation: 237
You're welcome!

With the amount of thinking you are putting into this ahead of time, the good questions that you are asking, and the amount of money you are seem to be saving for a down payment I really think you will be in very good shape. You will be going into the process with your eyes open and prepared, which is a world apart than some of the sub-prime borrowers of the recent years which landed into a heap of financial trouble.
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Old 02-22-2008, 11:15 AM
 
Location: Sometimes Maryland, sometimes NoVA. Depends on the day of the week
1,501 posts, read 7,663,498 times
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You might have better luck buying land with a small, run down house than just trying to buy land. Not only is it hard to get a loan on a mobile home, its hard to get a loan for land only. Expect to need a 50% down payment. Land only loans are light risk and banks don't give them easily. Banks will mortgage a house, but not land. At least not easily.
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Old 02-22-2008, 11:24 AM
 
Location: Oz
2,238 posts, read 6,429,969 times
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I would say save your money for that year or so, and use it for a down payment on a duplex. If you buy frugally (like, not in the trendiest most upscale area) you can still get something decent, and you'll have the other unit to help you carry the burden of your mortgage. Later on when you want more house and you can afford it, then you rent out both sides of the duplex and it makes its own mortgage payments and part of the payment on your new house.
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